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Interest in earthquake insurance on the rise

"Homeowners, quite literally shaken by last week's 6.8-magnitude earthquake, have inundated local insurance agencies with calls concerning earthquake insurance. We've had calls almost hourly since the quake, said Carrie Stevens, an agent at Northwest Insurance Company. We have people calling who are already clients wondering if they have it. Others are just inquiring about it. Insurance shoppers might be surprised to learn that there is a moratorium on earthquake coverage - insurance companies won't issue it for between 10 and 180 days after the day of the quake, depending on the firm.(Moratoriums) are standard practice, the idea being that it is rare to have no aftershocks, said Karl Newman, executive director of the Washington Insurance Council, a non-profit consumer education organization. Insurance companies insure against risk but they're not in the business of insuring an event while it's going on.Newman compared it to a car owner purchasing insurance while en route to collide with a semi-truck. Standard homeowners' insurance does not cover earthquakes, but coverage can be added as an endorsement. The cost varies depending on the value of a home. The deductible is generally 10 percent of the value of the home, and coverage will replace the dwelling if it is destroyed. For renters, the owner of the building must purchase insurance to cover rebuilding, but tenants can buy an earthquake insurance endorsement to cover the replacement of their possessions. The high deductible might be an inhibiting factor in filing claims if homes are not severely damaged.My personal view is that most people have not sustained major damages and because the deductible is so high people will probably just pay it themselves, Stevens said.Debbie Rollins, a department head at Olympic Northwest Insurance, agreed that she had not heard of many homes with extensive damage on the Kitsap Peninsula.I've been pleased, I haven't heard of a lot of people losing their property, Rollins said.Rollins recommends that people whose homes were damaged contact the Federal Emergency Management Agency (FEMA) to see if they qualify for low-interest loans to make home repairs. For more information about FEMA loans, visit www.fema.gov or call (800) 462-9029. The standard deductible is 10 percent and since most repairs will come in under that price, these loans may be an option, Rollins said. Newman noted that damages could have been much worse if the epicenter had not been deep and remote from population centers.The results could have been much worse if (the epicenter) were closer to Seattle. We would have been sitting on a pile of rubble, Newman said. According to the Washington Insurance Council, between 12 and 20 percent of households carry quake insurance. But many more should, Newman says, and people should take this quake as a warning.People should be making preparations, Newman said. This is almost like a nice wake-up call as opposed to the disaster it could have been.Earthquake insurance is expensive compared to fire or theft coverage, for several reasons. First, insurance works on a cost-sharing principle. When one home is destroyed, all policy holders help to shoulder the cost. Also, the potential for unstoppable damage affects costs for providers.When you have a fire, you can call the fire department to put it out and when you have a burglary, you can call the police to help you. When an earthquake hits there isn't anybody on earth you can call to stop it, Newman said in a Washington Insurance Council press release. "

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