EEaarrtthhqquuaakkee IInnssuurraannccee CLOSING THE INSURANCE GAP
Lessons learned from the aftermath of past disasters has revealed, time and again, that you can effectively manage risk and recover faster after a disaster if you have insurance. Why is it, then, insurance covering seismic claims is so rare?
Landscape today
Most insurance companies stopped insuring Traditional earthquake insurance covers damage earthquakes in the 1990s due to projections that 1. caused by an earthquake by indemnifying pure loss. 4. hinted that a major earthquake could make them insolvent.
Parametric insurance is a relatively new approach that Insurance companies that do offer earthquake insures policyholders against specific events by using 5. insurance include American Family, State Farm, and 2. a model to calculate the actual damage inflicted. GeoVera Insurance. Payments are triggered if set parameters agreed on in the contract are met and verified by a third party.
Most potential insurance buyers, if impacted by an Standard homeowners insurance does not cover 6. earthquake, would experience damage that does not 3. damage resulting from land movement or landslides. exceed their deductibles, making insurance’s high rates untenable.
Top three markets: CALIFORNIA WASHINGTON EXPERIENCES 90%90% ONLY of the country’s earthquakes. 11.3%11.3% ONLY of Washington’s residents were covered in 10%10% 2017, despite being the second largest market of its residents had earthquake insurance in 2014. in the seismic space.
MISSOURI Premium rates skyrocketed over a fifteen year period — in comparison:
of New Madrid property owners had 60%60% 20%20% earthquake insurance. IN 2000 IN 2014 EEaarrtthhqquu aakkee IInnss uurraannccee CLOSING THE INSURANCE GAP
Inside a Typical Earthquake Policy
COVERS: DOES NOT COVER: FIRES caused by an earthquake are covered under your homeowners insurance. REPAIRS to your home and attached structures. VEHICLE DAMAGE Comprehensive auto insurance is required to cover this.
FLOODS Flood insurance is needed, even if the PERSONAL flood is caused by an earthquake. BELONGINGS such as furniture and clothes. SINKHOLES Coverage can be added to your homeowners insurance or through separate coverage. Check first though – certain states mandate insurers offer sinkhole coverage.
ADDITIONAL MASONRY VENEER LIVING EXPENSES such as the brick, stone or rock used for for when your home is uninhabitable after your home’s veneer. an earthquake hits.
FEMA RISK MANAGEMENT DIVISION WWW.FEMA.GOV/EARTHQUAKE