Do NOT Buy Seattle Earthquake Insurance Until You Read This

There are two disturbing facts about the list of earthquakes in the Seattle area. First, there has been a 9.0 magnitude earthquake in the area, and second, the frequency of earthquakes has increased since 2001. Many earthquake scientists are concerned the Seattle area may be due another massive earthquake dubbed by the media as “The Big One”.

“The Big One” refers to the Cascadia subduction zone earthquake that results in a 9.0+ magnitude earthquake about every 300 – 500 years.  The report estimates when “The Big One” hits there will be 10,000 fatalities, 30,000 injuries, and about $70 billion in damage to property and economic costs.  Seismologist give the probability of a 9.0 earthquake happening in the Seattle area in the next 50 years around 10%.

The video below is Shepherd Smith report of The New Yorker’s findings. He is a little sensational in his proclamation that if he lived in the Seattle area he would consider moving because of the earthquake threat.

Four years ago, the BBC put together a 45 minute earthquake documentary about how devastating the subduction zone earthquake will be and how it is way over due.

Of the twenty major fault zones in Washington, eleven could have damaging effects to the Seattle area. According to the Washington State Seismic Hazards Catalog, the most devastating earthquake faults would be the Seattle Fault, Cascadia Fault, Southern Whidbey Island, Seatac Fault, and Nisqually Fault.

Earthquake insurance covers the catastrophic loss sustained by an earthquake. The earthquake insurance company will insure a your home for the amount necessary to rebuild the property.  The earthquake policy includes a deductible ranging from 10% to 25%.

For example, a policy with a coverage amount of $500,000 and a 10% deductible means the policyholder is responsible for the first $50,000 in damage and the insurance company is responsible for the remaining $450,000.  Even though the earthquake deductible is higher than the typical $1,000 deductible on your home insurance, if your home was destroyed by an earthquake, it would be better to have 90% of the cost to rebuild your home paid for by the insurance company than to pay 100% to rebuild your home plus the mortgage amount you still may owe on the destroyed home.

Earthquake Coverages:

Dwelling – The total cost to rebuild your home.

Personal Property – Includes the total value of all portable property you own.

Other Structures – Detached garages and other detached structures including Barbecues, satellite dishes, greenhouses, and tool sheds.

Loss of Use – Covers additional living expenses up to 12 months.

The rate you pay for earthquake insurance is determined by the amount of coverage requested and the risk to insure the structure including location to fault lines and liquefaction areas, age of home, and type of structure. The cost of earthquake insurance can range from 20% – 100% of your current homeowners insurance.

ShakeOutBC,  put together an excellent resource (website and the video below) to help people living in the Northwest prepare for a magnitude 9.0 earthquake. The video simulates a hypothetical, but plausible earthquake occurring off the coast of British Columbia. A huge tsunami races towards land at the speed of an airplane. Learn what damage can be expected and what people can do to prepare themselves to survive a devastating earthquake and its aftermath.

Earthquake insurance is available either as an endorsement to your homeowner’s policy, or as a standalone earthquake policy. Getting endorsement on your homeowner’s policy has been more difficult recently as many insurance companies have dropped their earthquake coverage.  Don’t worry, we still can help you obtain earthquake insurance with some of the top insurance companies in the United States.  Please fill out the earthquake insurance quote form to evaluate your options.

Unfortunately for homeowners in Seattle the number of insurance companies offering earthquake insurance has dwindled over the last decade.  Most of the major insurance companies such as Allstate, Farmers, and PEMCO dumped their earthquake exposure after the unprecedented losses occurred in Katrina.  Homeowner’s who had earthquake insurance with those companies received letters after 2007 that their current earthquake insurance would be cancelled and they would need to secure coverage from another insurance company. Not very nice.