Quake question for you: Extra home insurance, or not?

Let's ask the people who know how bad it can be: geologists. They say they prefer to put that money into home modifications that can lessen damage if the foundation starts moving.
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The widespread effect of the Nisqually earthquake of 2001. (U.S. Geological Survey)

Let's ask the people who know how bad it can be: geologists. They say they prefer to put that money into home modifications that can lessen damage if the foundation starts moving.

News of distant natural disasters invariably triggers fears of calamities that could clobber us locally. It happened again just last month when Southern California fires fueled calls to Seattle insurance agents about earthquake coverage. Interest may also have been primed by a recent analysis showing that several Seattle neighborhoods may be more vulnerable to earthquake damage than previously believed. So what, we wondered, do local geologists do when it comes to earthquake insurance? According to a highly unscientific survey, most do what the rest of us do – they go naked, playing the odds that a big-time seismic temblor won't swallow them and their homes.

Seattle geologist Bill Laprade, who has mapped hundreds of local landslide hazards and analyzed past glacial action, notes that shallow earthquakes - the type that would devastate the city - have a "recurrence interval of 2,000 to 3,000 years." Noting that the last one took place some 1,100 years ago, Laprade said, "probability wise, we're not going to have it [the big one] in our lifetime." He likens his choice to pass on earthquake insurance to zipping through town on the Alaskan Way Viaduct instead of detouring east to Interstate 5 or to safer side streets. In the back of your mind, you know that if an earthquake strikes while driving on the Viaduct, "you're probably toast," notes Laprade. "We balance risk every day."

According to industry surveys, more than eight in 10 state homeowners decline earthquake insurance, said Karl Newman, president of the Northwest Insurance Council, a Seattle-based trade association. An even smaller percentage of renters take coverage as a hedge against earthquake damage to the contents of their homes, he said.

Several large carriers offer earthquake insurance [60K PDF], though some exclude homes over a certain age or require that they be retrofitted to minimize damage. In general, earthquake coverage roughly doubles the cost of your homeowner's policy, Newman said.

But an additional unattractive aspect is that most policies impose a series of 10 percent deductibles. For example, let's say you insured your home for $600,000 – the contents for $100,000 and a detached garage for $60,000. If an earthquake struck and you sustained damage in each coverage area, you would be responsible for the first $60,000, $10,000 and $6,000, respectively. In other words, it would take cataclysmic loss before your coverage kicked in.

Despite the expense, Newman recommends that every homeowner consider earthquake insurance. Asked if he takes it himself, Newman said he does not. But he said he plans to take out the coverage once he retrofits his home, which he estimated will cost about $6,000.

Like Newman, University of Washington-based seismologist Joan Gomberg plans to retrofit her old house. Unlike him, Gomberg, who is with the U.S. Geological Survey and has studied Seattle's earthquake risk, does not plan to buy earthquake insurance.

"In general I'm not a fan of insurance," she said via e-mail. "However, I do think it's essential in the Pacific Northwest to have some sort of 'insurance' for earthquakes, and we have chosen to retrofit our house to accomplish this. We've only lived here a little over a year and just bought an old house that needs to have the structure tied to the foundation. Even though it's a major expense I feel it's a better investment than buying earthquake insurance. I want to be sure the house stands when an earthquake happens and that the damage is minimal enough to be reparable - then I'll be comfortable that our safety is insured and our investment."

Even some insurance agents think hers is the smart approach. Veteran Seattle Farmers Insurance agent John Evans says he happily pocketed the commissions back when Farmers was still selling earthquake insurance. It quit in 2001, after the Nisqually quake. Many of those who purchased it before then, Evans recalled, were shake-rattled California transplants.

But Evans never purchased the coverage for his own home, reasoning that even 5 percent deductibles, which Famers used to offer, were too high. His general advice for consumers is to hang on to their money, or use what they would have spent on premiums to instead retrofit their homes.

Even though no geologist who responded to Crosscut's inquiries said they bothered with earthquake insurance, some were quick to point out that that does not mean they turn a blind eye to where they live. In other words, they steer clear of homes built on slopes or soft soils.

Take Dick Galster, a consulting engineering geologist who for a dozen years was chief geologist for the U.S. Army Corps of Engineers in Seattle, supervising seismic analysis of many of the region's dams. In 1949, he was a 19-year-old University of Washington geology student listening to a lecture in Bagley Hall when a 7.1 magnitude earthquake shook the building.

Still, Galster never purchased earthquake insurance for his homes because "we never felt it was necessary." By the same token, he said he would think twice about living in the Duwamish Valley, a sentiment echoed by Laprade.

For what it's worth, local emergency management bosses apparently are more prone to take earthquake coverage. Barb Graff, the city of Seattle's emergency-management chief, said she added it to her homeowner's policy, "practicing what we preach."

Jeff Bowers, acting director of King County's Office of Emergency Management, said that as a renter he always kept supplemental earthquake insurance for the contents of his home. He recalled that when he became a homeowner a couple months ago, his carrier declined to cover his home until it is retrofitted and better bolted to the foundation. Bowers said he hopes to get that done in the next year or so.


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