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Answers (27)
Best Answer
- Nicole Larsen, "Nicole Larsen"
- Contributions:5
Well, it is always a personal choice, weighing the costs vs benefit...
Is that for a combo policy, your regular home owners and earthquake combined? Or is that a seperate stand alone earthquake policy? There is always a seperate deductilbe of at least 5% on earthquake policies...seperate from the typical $500 or $1000 most carry on their standard home owners policy...
It never hurts to shop around...as with everything...
The benefit is that if your home were to shift off the foundation, you could go to your earthquake coverage for a claim, if the damage/cost of repairs exceeds your deductible...that is the most typical large earthquake claim... If we (Seattle area) were to have a major one, could you rely on FEMA to help you repair/replace your home? ....
I would guess that less than 1 in 10 carry earthquake in our area...
Hope that helps, let me know if I can help more....
Is that for a combo policy, your regular home owners and earthquake combined? Or is that a seperate stand alone earthquake policy? There is always a seperate deductilbe of at least 5% on earthquake policies...seperate from the typical $500 or $1000 most carry on their standard home owners policy...
It never hurts to shop around...as with everything...
The benefit is that if your home were to shift off the foundation, you could go to your earthquake coverage for a claim, if the damage/cost of repairs exceeds your deductible...that is the most typical large earthquake claim... If we (Seattle area) were to have a major one, could you rely on FEMA to help you repair/replace your home? ....
I would guess that less than 1 in 10 carry earthquake in our area...
Hope that helps, let me know if I can help more....
- Caquakeinsurance
- Contributions:1
It's interesting that people tend to see earthquake coverage as being less valuable than homeowners (fire) coverage when the odds of a threat are very similar. Actually, a devastating quake is guaranteed to rock most of California in the next 30 years but the chances that wildfire destroying your
home are not guaranteed. I've been a licensed insurance agent for five years now and the quake premiums are typically just as much as the home owner premiums. The real question is who your coverage is with and whether you could get more for your money. A great resource on this topic is [website deleted by Zillow moderator]- very informative about what your options are and who covers what. Hope that helps!
home are not guaranteed. I've been a licensed insurance agent for five years now and the quake premiums are typically just as much as the home owner premiums. The real question is who your coverage is with and whether you could get more for your money. A great resource on this topic is [website deleted by Zillow moderator]- very informative about what your options are and who covers what. Hope that helps!
- wetdawgs
- Contributions:23291
With a magnitude 8 to 9 earthquake overdue just off the coast of Washington/Oregon along the Cascadia fault, Seattlites should indeed be aware of earthquake consequences (IMHO)!
- minotau
- Contributions:71
People in Seattle buy earthquake insurance? With apologies to Spencer & Company - LOL! I think about 13% of of folks in California have earthquake insurance.
Just thinking out loud, I'd guess that Spencer's home would have to worth many millions of dollars for his $1,000 policy to make any sort of sense.
John Rundle's site is very, very nice. We were discussing earthquake insurance yesterday for a home we just purchased in LA and John's "Home Damage Estimator" really helps to put things in perspective. It shows me that with a 15% deductible we would need a very large quake to take place very close to our property before we'd see a payout from the insurance.
Just thinking out loud, I'd guess that Spencer's home would have to worth many millions of dollars for his $1,000 policy to make any sort of sense.
John Rundle's site is very, very nice. We were discussing earthquake insurance yesterday for a home we just purchased in LA and John's "Home Damage Estimator" really helps to put things in perspective. It shows me that with a 15% deductible we would need a very large quake to take place very close to our property before we'd see a payout from the insurance.
- Galtha48
- Contributions:2
What will FEMA do for you after an earthquake? Well, my father got a low interest LOAN from FEMA to replace the brick siding on his 2 story, 4 plex apartment building. The cost was around $100K for that job. In addition he had to do quite a bit of plaster work inside the apartments himself. The building is probably worth $600K in today's market.
- Galtha48
- Contributions:2
Look at the cost of replacing your home, minus the deductibles on each policy. Then look at your risk. If you live in an area that is prone to earthquakes but have not had one for quite a while, I would suspect that your risk is higher and therefore insurance might be a good idea. Remember that you will likely have to pay for minor damage, perhaps up to $30K or more yourself, even with a good policy. But, if your home is worth, say $300K and is totaled you could come out $270K to the good in the worst case. Also a factor is how much is owed on your home. An earthquake could force many folks into bankruptcy if their home was totally destroyed.
- sunnyview
- Contributions:23994
John, I love the tools on your website. They are great!
- John Rundle, "John Rundle"
- Contributions:2
Spencer, typically policies are set so that the chance of loss to the insurance company is about 1% (the target ruin probability). In California, there is the usual deductible, which is usually about 15% of the cost of the structure. For a structure worth, say, $200,000, this means that you, the homeowner, are responsible for the first $30,000 of damage to your home, after which the insurance kicks in. If the damage is less than $30,000 to your home, you'll receive no payout. Another thing to remember is that typically, about 55% of the damage from an earthquake is non-structural, meaning damage to furniture, dishware, valuable items, and other such. For this protection, the yearly premiums are in the neighborhood of $1000 to $1500 or so. You can find out considerably more information about these matters at www.openhazards.com, where we provide a great deal of free information as well as tools that allow you to develop some understanding of your exposure.
- David Poulsen, "Sonoma Co Specialist"
- Contributions:49
Spencer, You have to weigh all the options. Do you live in an earthquake area? Are you near a fault? When was the last time a major quake hit your city and what was the damage like? If I sustained damage what is it more likely to be and how much is the deductible. Would the damage be more than the deductible? How and when was my home built? Bolted to the foundation? There are so many questions to be answered that are specific to the property being insured, I think the best person to ask is your insurance agent, who could help you make a better educated answer.
- Tyler Rygmyr, "Tyler Rygmyr"
- Contributions:193
Spencer, man I would ask myself. "What if a good size earthquake did really hit, would I be able to pay cash to repair the home?" Could you imagine having tens of thousands in damages to your home with no one paying you a penny to make the repairs.
We just had a 1000 year flood in Nashville this spring and many of my clients and good friends completely lost their homes. Totally ruined..some of these homes were in the half million dollar range. The bank told them they still need to pay on it because they have loans. Can't sell it so they will become foreclosures. They can't even live in the homes and many of them didn't have flood insurance because the lender did not require it. If you live in an earthquake prone area I would get it.
We just had a 1000 year flood in Nashville this spring and many of my clients and good friends completely lost their homes. Totally ruined..some of these homes were in the half million dollar range. The bank told them they still need to pay on it because they have loans. Can't sell it so they will become foreclosures. They can't even live in the homes and many of them didn't have flood insurance because the lender did not require it. If you live in an earthquake prone area I would get it.
- Sam DeBord, "SeattleHome.com"
- Contributions:3490
Wow, this is still getting answers.
In WA, earthquake insurance is a racket. There is so little chance of getting an insurance payout, that you might as well buy lottery tickets.
In WA, earthquake insurance is a racket. There is so little chance of getting an insurance payout, that you might as well buy lottery tickets.
- ClownHouse
- Contributions:1
I live on bedrock in the Santa Monica mountains. I don't like that I would have to pay the same premium as people living on the floor of the San Fernando Valley even though THEY'RE homes are much much more at risk. The house I'm in was undamaged by the Northridge quake. Heck, MOST homes in even the Valley didn't suffer major damage from the Northridge quake. At the time I lived 10 miles from the epicenter and my home was fine. The San Andreas fault is WAY out by Palmdale. Even less worry. So I am not shelling out $850 a year for quake insurance. Just not worth it. So far I've saved about $15,000 not counting interest. That's the way I look at it.
- John Rundle, "John Rundle"
- Contributions:2
Spencer, You can gain some useful information regarding the earthquake risk to your home by visiting the web site:
http://www.openhazards.com
John Rundle
Professor of Physics and Geology
University of California, Davis
Executive Director, APEC Cooperation for Earthquake Simulations
Director, California Institute for Hazard Research of the University of California
http://www.openhazards.com
John Rundle
Professor of Physics and Geology
University of California, Davis
Executive Director, APEC Cooperation for Earthquake Simulations
Director, California Institute for Hazard Research of the University of California
- Mack McCoy
- Contributions:805
Ruth, I gotta know: How did the insurance companies deal with the quake of 1989? How did the insured make out? How long did it take for most of the residential damage to be repaired, and did the insurance cover the costs well? Were the alternate living allowances enough?
- Ruth Stroup, "Insurance Agency"
- Contributions:14
I live and insure clients along the Hayward Fault (east bay, sf bay area) where a major quake is considered "overdue" and "predicted" in the next 36 years. Clients ask me all the time of my opinion, and of course, as an insurance agent, I think that coverage is important.
The question I ask my clients to consider is what they would do if there is a major quake. Would they be willing to move? Willing to walk away from the money that's in their home? If yes, then perhaps the policy is not worth it. If their quality of life is more negatively impacted by losing their home as an asset than by paying the premium, then I recommend they buy the insurance.
Ultimately it's a personal choice as the banks do not require earthquake coverage, even along a fault line.
The question I ask my clients to consider is what they would do if there is a major quake. Would they be willing to move? Willing to walk away from the money that's in their home? If yes, then perhaps the policy is not worth it. If their quality of life is more negatively impacted by losing their home as an asset than by paying the premium, then I recommend they buy the insurance.
Ultimately it's a personal choice as the banks do not require earthquake coverage, even along a fault line.
- agentblu15
- Contributions:353
everyone above has given some really good data and insight from an official perspective. I'm going to digress from that and give a more subjective view:
I would NOT get earthquake insurance, because my thoughts are that if you're not willing to take the location-specific risks associated with living somewhere, and aren't confident in your home's safety without insurance, you probably shouldn't live there.
If you're worried about mudslides/wildfires/earthquakes, don't buy a house in Cali.
If you're worried about earthquakes, don't buy a house on the west coast.
If you're worried about hurricanes, don't buy a house on the southeastern coast.
If you're worried about tornados, don't buy a house in the midwest alley.
If you're worried about high crime, don't buy a house in a big inner city.
At the point where a feature of your surroundings worries you enough that you feel the need to spend thousands insuring against it, it's probably a sign that you're not comfortable with your surroundings, and should think about changing them. Insurance is wonderful for things that you can't avoid, and can't anticipate -fire, theft, car accident, death, etc. But for locational issues that can be avoided, you should come to terms with taking your chances before you decide to live there.
I would NOT get earthquake insurance, because my thoughts are that if you're not willing to take the location-specific risks associated with living somewhere, and aren't confident in your home's safety without insurance, you probably shouldn't live there.
If you're worried about mudslides/wildfires/earthquakes, don't buy a house in Cali.
If you're worried about earthquakes, don't buy a house on the west coast.
If you're worried about hurricanes, don't buy a house on the southeastern coast.
If you're worried about tornados, don't buy a house in the midwest alley.
If you're worried about high crime, don't buy a house in a big inner city.
At the point where a feature of your surroundings worries you enough that you feel the need to spend thousands insuring against it, it's probably a sign that you're not comfortable with your surroundings, and should think about changing them. Insurance is wonderful for things that you can't avoid, and can't anticipate -fire, theft, car accident, death, etc. But for locational issues that can be avoided, you should come to terms with taking your chances before you decide to live there.
- droopyd
- Contributions:397
My take on it is that even in a fairly severe quake, you won't suffer damages in excess of your deductible.
This is especially true for newer construction that meets current seismic codes.
This is especially true for newer construction that meets current seismic codes.
- Mack McCoy
- Contributions:805
There's a twist on evaluating earthquake insurance, which is that policies available in Seattle provide only catastrophic coverage (no payout if your chimney or Roman Brick veneer pops off); the interesting part is: what would happen in the event of a major catastrophe.
If there's major regional devastation, the insurance company might not have the resources to pay everybody off fully. Even if they do, the coverages might be insufficient: if 150,000 structures need rebuilding, shortages of materials and labor mean longer rebuild times and higher prices.
Then, where do you live in the meantime? The hotels that remain standing will be overflowing, and their rates will exceed your coverage.
And, like fire insurance, the policy only covers the structure, but you're paying the mortgage on the structure and the land.
So it may still be worth carrying, but don't expect it to work like a vaccination. It could be years before your home gets rebuilt, and interest, it is said, never sleeps.
If there's major regional devastation, the insurance company might not have the resources to pay everybody off fully. Even if they do, the coverages might be insufficient: if 150,000 structures need rebuilding, shortages of materials and labor mean longer rebuild times and higher prices.
Then, where do you live in the meantime? The hotels that remain standing will be overflowing, and their rates will exceed your coverage.
And, like fire insurance, the policy only covers the structure, but you're paying the mortgage on the structure and the land.
So it may still be worth carrying, but don't expect it to work like a vaccination. It could be years before your home gets rebuilt, and interest, it is said, never sleeps.
- Eric Kossian, "InsurePro"
- Contributions:29
Yes, the best place to determine (for only a few dollars!) the risk of major loss to your home from earthquake, flood, and wildfire is from riskmeter.com. You can order reports showing the relative risk of earthquake, flood and wildfire for most locations nationwide. This is especially helpful for home buyers. If trying to decide between 3 homes in King county, why pick a home that is built on river silt and has a high risk of earthquake? Insurance companies are coming round to this type of accuracy in rating for earthquake and wildfire, which means rates in the furture will be even more location specific. Good buyers agents might want to provide this info to their clients.
It also helps homeowner's know what type of insurance they should buy. FOr example,take earthquake. The riskmeter report shows the home is on pretty solid ground but still near a major fault, they may want to get a policy with a only a $1000 deductible but limiting payment for loss to $50000. For those at risk of substantial loss, they would likely want to buy that policy and a traditional earthquake policy that typically has a deductible of 15% of the value of the home. Even with both of these policies, higher valued homes would likely have some degree of unisured loss.
It also helps homeowner's know what type of insurance they should buy. FOr example,take earthquake. The riskmeter report shows the home is on pretty solid ground but still near a major fault, they may want to get a policy with a only a $1000 deductible but limiting payment for loss to $50000. For those at risk of substantial loss, they would likely want to buy that policy and a traditional earthquake policy that typically has a deductible of 15% of the value of the home. Even with both of these policies, higher valued homes would likely have some degree of unisured loss.
- Geordy Rostad, "geordy"
- Contributions:991
Do you have a link to those maps you could post here? That is a very interesting perspective on condos. I'm giving you a thumbs up since this is great information to think about. Keep on posting on Zillow here!
- Eric Kossian, "InsurePro"
- Contributions:29
Earthquake coverage in Washington State complicated. From the research I have done on the US Geological Service website, there is great concern about a magnitude 9 earthquake in the Seattle area. As this is a geological event, the effected area at that magnitude (exteme shaking for 3-5 minutes) would be much greater than the 7.5 (30 seconds of shaking) Loma Prieta earthquake in Cal. My house was 120 miles north of the epicenter and had minor cracking to the stucco. There is a seismic map for the Seattle proper only (does not show the east side Bellevue area) done in 2007. If your home is on that map for a likely high damage area, then I would buy earthquake for sure as home would likely be totalled. If your home is on fill dirt, (even compacted prior to building) or on natural soft ground like near a lake or river bottom, good fertile soil type,on a hillside or has brick veneer, I would also get earthquake, for sure. Outside those categories it should still be considered.
There are different types of earthquake policies available. Most have a 10% deductible, so on a house with $700,000 of Dwelling coverage, your deductible would be $70,000. The reason those policies have a 10% deductible is insurance companies found that many homes had damage during a 7.5 quake, totalling 0-10% of the homes value. If the damage was much beyond 10% it was often a total. (see soil types above).
There is a policy available which has only $1000 deductible and provides $50,000 of coverage (MUCH more likely to result in claim payment) and in the King County area costs about $630 yr. Outside of King County, it is about $530 yr.
There are also major fault lines stretching from Hood canal, through Snohomish, Issaquah then out to Yakima.
It is only a matter of time...
One last thought. This is a major issue for condo owners in Western Washington. Most Condo Association policies, which cover the building coverage, do not cover earthquake due to the added cost. Keep in mind that a large building is more likely to suffer damage than most single family homes. Members simply won't vote for the extra cost. Even if your building were not damaged but say, the assocaition club house was totalled, every owner would be assessed. In past California quakes, it was not uncommon to see assessments of $50,000 or more. Even with "assessment coverage" included on individual condo policies (covering mostly just your contents), assessment for earthquakes are not generally not covered.
If I lived in a condo In Western Wash., I would ask in writing for earthquake coverage to be added. If the board does not add it, I would in writing, let the board know that should an earthquake occur resulting in a damage assessment, that you will sue the board for failure to act properly to protect the associations members by failing to obtain earthquake coverage. Even with Assoc. earthquake coverage, members can still be assessesd their portion of the 10% deductible, which could be $10,000 or more.
There are different types of earthquake policies available. Most have a 10% deductible, so on a house with $700,000 of Dwelling coverage, your deductible would be $70,000. The reason those policies have a 10% deductible is insurance companies found that many homes had damage during a 7.5 quake, totalling 0-10% of the homes value. If the damage was much beyond 10% it was often a total. (see soil types above).
There is a policy available which has only $1000 deductible and provides $50,000 of coverage (MUCH more likely to result in claim payment) and in the King County area costs about $630 yr. Outside of King County, it is about $530 yr.
There are also major fault lines stretching from Hood canal, through Snohomish, Issaquah then out to Yakima.
It is only a matter of time...
One last thought. This is a major issue for condo owners in Western Washington. Most Condo Association policies, which cover the building coverage, do not cover earthquake due to the added cost. Keep in mind that a large building is more likely to suffer damage than most single family homes. Members simply won't vote for the extra cost. Even if your building were not damaged but say, the assocaition club house was totalled, every owner would be assessed. In past California quakes, it was not uncommon to see assessments of $50,000 or more. Even with "assessment coverage" included on individual condo policies (covering mostly just your contents), assessment for earthquakes are not generally not covered.
If I lived in a condo In Western Wash., I would ask in writing for earthquake coverage to be added. If the board does not add it, I would in writing, let the board know that should an earthquake occur resulting in a damage assessment, that you will sue the board for failure to act properly to protect the associations members by failing to obtain earthquake coverage. Even with Assoc. earthquake coverage, members can still be assessesd their portion of the 10% deductible, which could be $10,000 or more.
- Nicole Larsen, "Nicole Larsen"
- Contributions:5
Spencer, you are welcome.
I would just point out that just because the majority of people don't do something, doesn't mean it is the right or correct thing to do.
As I said there are always costs vs benefits to consider and it really comes down to a matter of choice for each of us and deciding what was best.
There are many different companies and policies and deductibles available that can change your policy price. If you want to keep it, but lower the price, raise your deductible to 15% or 20%. You'll be responsible for more of the damage, but still have help there if you really needed it. I've seen this drastically reduce policy costs.
I would just point out that just because the majority of people don't do something, doesn't mean it is the right or correct thing to do.
As I said there are always costs vs benefits to consider and it really comes down to a matter of choice for each of us and deciding what was best.
There are many different companies and policies and deductibles available that can change your policy price. If you want to keep it, but lower the price, raise your deductible to 15% or 20%. You'll be responsible for more of the damage, but still have help there if you really needed it. I've seen this drastically reduce policy costs.
- Geordy Rostad, "geordy"
- Contributions:991
This trend of over-engineering with Simpson strong ties seems much more recent than 1994 so I think you are probably ok in that department. I wouldn't worry about the house so much in your case as I'd worry about what is around the house. Slopes, rockeries, retaining walls, etc.
I was speaking with a framer the other day and he was reminiscing about homes he built in the 1980's. He said that he'd frame them up and if you stood up on the roof, you could rock the whole house several feet in each direction until you put sheeting and siding on it. Then it would get nice and solid. I still see a lot of 1980's homes standing to this day. ;-)
I was speaking with a framer the other day and he was reminiscing about homes he built in the 1980's. He said that he'd frame them up and if you stood up on the roof, you could rock the whole house several feet in each direction until you put sheeting and siding on it. Then it would get nice and solid. I still see a lot of 1980's homes standing to this day. ;-)
- Spencer Rascoff, "spencer"
- Contributions:2093
Thanks Geordy,
My house is pretty new -- built in 1994.
I'm starting to think maybe I should save this $1000 bucks and not renew...
and don't worry everyone, i promise not to sue you if i decide not to renew and my house falls down.
My house is pretty new -- built in 1994.
I'm starting to think maybe I should save this $1000 bucks and not renew...
and don't worry everyone, i promise not to sue you if i decide not to renew and my house falls down.
- Geordy Rostad, "geordy"
- Contributions:991
Hey Spencer-
I'd guess even less than 1 in 10 have it here. Do you live on a sloped lot? In an old house? Below a slope?
I look at it this way, many many homes in Seattle are 100 years old and have been through some earthquakes already. Most of them are still standing. In fact, I can't think of a case where one fell over.(directly from earthquake damage) Perhaps I'm naive there though.
The newer homes all have these earthquake straps that tie the foundation to the home. Simpson seems to be the only company that makes these straps and the reasons for using them seems more political than practical. I'm no engineer but in my opinion, you WANT the house to move independent of the foundation. If not, it seems like the weight of the foundation is going to tear the house to shreds with any major movement because it's only tied together at these specific points and this would create a lot of stress at those points.
If you look at how skyscapers are designed, they move a bit in a heavy wind let alone an earthquake. The movement is what keeps them standing.
These are the factors I would consider when choosing whether to renew or not.
I'd guess even less than 1 in 10 have it here. Do you live on a sloped lot? In an old house? Below a slope?
I look at it this way, many many homes in Seattle are 100 years old and have been through some earthquakes already. Most of them are still standing. In fact, I can't think of a case where one fell over.(directly from earthquake damage) Perhaps I'm naive there though.
The newer homes all have these earthquake straps that tie the foundation to the home. Simpson seems to be the only company that makes these straps and the reasons for using them seems more political than practical. I'm no engineer but in my opinion, you WANT the house to move independent of the foundation. If not, it seems like the weight of the foundation is going to tear the house to shreds with any major movement because it's only tied together at these specific points and this would create a lot of stress at those points.
If you look at how skyscapers are designed, they move a bit in a heavy wind let alone an earthquake. The movement is what keeps them standing.
These are the factors I would consider when choosing whether to renew or not.
- Spencer Rascoff, "spencer"
- Contributions:2093
Nicole,
Thanks for your advice. This is a separate policy from my homeowner's policy.
Thanks for your advice. This is a separate policy from my homeowner's policy.
- Will Goode, "FHA GURU"
- Contributions:52
I dont really know... In AZ we dont have earthquake insurance... Just "Melt your face off Insurance" it gets so HOT.
I think if you were in CA., then maybe... but Seattle.. How many Earthquakes have you experienced? Plus how is your Luck... Mine would be as soon as I pass on the renewal... BAM! Earthquake!
I think if you were in CA., then maybe... but Seattle.. How many Earthquakes have you experienced? Plus how is your Luck... Mine would be as soon as I pass on the renewal... BAM! Earthquake!
Is earthquake insurance worth it?
-
- 0.0/5.0
Contributions:2093Policy covers $650K ($550K for the building, plus $100K for personal property and living expenses)
$1005 a year seems outrageous
any advice?
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