We have been in the disaster respond business as general and manufactured home contractors for almost 30 years. We've worked in every California seismic event since 1986. When a signifiant event hits in an area every structure is at risk of some level of destruction.
As others have mentioned insurance companies charge very high deductible i.e. 10% of the total premium or up to $100k deductible if they stay solvent throughout the process. Even when you step up to the plate and pay your premium you can always count on the insurance adjuster to low ball your claim and drag it out for months on end making it a very frustrating and agonizing experience for you.
The best advice I can offer up is to purchase your EQ coverage from the: http://www.earthquakeauthority.com/
and hope they remain solvent and pay their claims as promised which is somewhat questionable at best as California is almost insolvent in and of itself. A major seismic event or any disaster for that matter would no doubt bring Cali to it's knees.
As an experienced disaster response contractor about the best advice I can offer up if you're really intent in living in an EQ prone area is to just plain prepare. You need to have your home inspected by an experience EQ engineer/contractor/expert.
They will inspect the foundation to make sure that it is properly anchored to the structure with EQ straps. If the home has a crawl space they will check to make sure that the cripplewall has been properly shear paneled. They will also check the fireplace chimney to make sure that it has been properly reinforced. They should also inspect the walls, ceiling and roof structural members to make sure that they have been reinforced with EQ straps.
As an added precaution it will be incumbent on you the homeowner to be proactive as well by installing safety latces on all your cuppards and doors and installing anchoring mechenizims behind all of your appliances i.e. refer, stove, dishwasher, washer/dryer, heavy furniture, etc.
Finally but certainly not lastly you will need to secure all your finery, glassware, nick nacks, etc. by means of a quick drying glue or an approved EQ adhesive of some type. Here's a link that will direct you to some EQ companies that actually sell myriad EQ related products and services.
Let me remind you however that you should always us a licensed and experienced EQ general contractor for any structural retrofitting that may need to be provided to make sure your home is made as safe as is possible should you be caught in an EQ.
Lastly, you can never be too prepared. In all the natural disasters I've ever worked in I've never seen a person red tagged (Home condemned and render uninhabitable) when these measures have been taken. That's not to say that you couldn't be yellow tagged, (extensive damaged but inhabitable) or green tagged (light damage and inhabitable).
But it's better to have a home to go home to with surface damage you will have to tend to than to be one of the thousands of victims whose life was turned upside down and has no place to live for several months if not years. Always exercise on the side of caution.
Should you need any additional information please feel free to contact us anytime. My cell is 760 815-6977 or feel free to email me at firstname.lastname@example.org. Also feel free to visit our very user friendly websites anytime: