For years, scientists believed the mighty San Andreas—the 800-mile-long fault running the length of California where the Pacific and North American plates meet—could only rupture in isolated sections.

But a recent study by federal, state and academic researchers showed that much of the fault could unzip all at once, unleashing a rare, singular catastrophe.

Now, insurers have used that research to come up with a new analysis of the damage that could be caused by statewide break of the San Andreas. The analysis, by CoreLogic Inc., a real-estate analytics firm in Irvine, Calif., lays out an alarming scenario of destruction. Related stories… As many as 3.5 million homes could be damaged in an 8.3-magnitude …