This could leave many properties in the older area economically obsolete.Black Swan EventsPandemics, wars, natural disasters (earthquake, hurricane, tornado, fire, terrorism, etc.).

Had outstanding returns despite the 1989 earthquake-which did set me back quite a bit.

If you're going the umbrella insurance route, make sure it will cover you for several things including just the routine slip and fall (like mold or earthquake).

When I do the same (pick anywhere, with an investor focus) I select no snow and ice, no hurricanes/tornadoes/storms, no earthquakes or flooding , stable geology/less foundation issues, low humidity,  no state income tax, reasonable property tax and not nut-so pro-tenant   So OH doesn't fit for weather.  

Since it is a first time buyer program in an area with mudslides fires, and earthquakes you have the additional total loses in certain regions due to natural disaster or possible lose to foreclosures on these inexperienced buyers who in foreclosure damage properties before resale.  

P.S. this home is in Maine, not California, so earthquakes are not a concern.

So I'm looking at buying a duplex in the LA area as a house-hack and I'm wondering what everybody's thoughts are on earthquake insurance?

Add a nice west coast earthquake to the no notice and throw in a tsunami .. 

More folks in Oklahoma were concerned about EARTHQUAKE insurance in the mid 2010s.

When I go to Los Angeles, so many of these places are just dirty dust bowls with degraded blacktop, or under some earthquake prone building that will fall and crush my car and me.And on street parking is either hard to find, or has sketchy looking individuals lurking around the area.Something a little nicer would be a draw for someone like me.Maybe your lot could be something like that.Good Luck!