June 25, 2020, Bellevue, WA—Ben Musser, Associate Account Executive, Personal Insurance
Expect the Unexpected
If the past few months have taught us anything, it’s to expect the unexpected. Large-scale disasters happen, and there’s only so much we can do to prepare. However, people that take precautions are often at an advantage in the aftermath of disaster. Not only are they better able to recover financially, they are usually in a better position to help others.
In the Pacific Northwest, one disaster we can prepare for is an earthquake. As mentioned in my previous post, experts say residents living west of the Cascade Mountains in Oregon and Washington are at risk of a “megathrust” earthquake with a magnitude that could reach levels never before recorded .
Earthquake Coverage Options
Coverage for earthquake damage is typically excluded on homeowners’ policies. However, you can purchase it as an endorsement or a standalone policy. Many of The Partners Group’s preferred carriers offer earthquake endorsements. We also work with carriers who provide standalone coverage.
Unlike typical insurance deductibles that specify the amount you will pay in the event of a covered loss, earthquake policies often use percentages. Deductibles range from as low as 2.5% up to 25%.
For example, imagine your dwelling coverage is $800,000 and you choose a 10% deductible. You would be responsible for the first $80,000 of loss in the event of an earthquake damaging your home. Choosing a deductible amount depends on the premium you are willing to pay for earthquake protection as well as the financial risk you are willing to absorb.
Earthquake policies provide flexibility in terms of how property is covered. Some coverage options available are:
- Dwelling—covers the physical structure of your home or your condo unit.
- Personal Property—replaces the contents of the dwelling you own, such as electronics, furniture, and clothing.
- Loss of Use—pays for a rental and living expenses if your residence is deemed uninhabitable.
- Loss Assessment—covers assessment charges from Homeowners Associations.
Prepare, Don’t Fear
To find the earthquake policy best suited to your overall risk management strategy, it’s important to consider the pros and cons of each option. Talk with your independent insurance agent about adding earthquake protection to your current insurance program. The chance of a large-scale earthquake in the Pacific Northwest should not drive us into fear and anxiety; instead, it should encourage us to ask how we can better prepare and ensure a swifter recovery of infrastructure and our economy.
Read Ben Musser’s blog post Earthquake Preparedness in the Pacific Northwest, Part I.
 Totten, Michael J. “Off the Richter Scale.” City Journal, Winter 2019, www.city-journal.org/pacific-earthquakes.