 |
        |
|||
|
|
Washington Insurance Council Consumer Alert Contact:
Karl Newman, Executive
Director Washington Insurance Council Earthquake insurance: why is it so expensive?SEATTLE – Shattered chimneys, cracked walls and broken windows all over Western Washington may have given you reason to think again about buying earthquake insurance to protect your home from the next quake. Estimates show only 12% to 20% of Washington homeowners had earthquake coverage before Wednesday’s shakeup. Many homeowners say they don’t have earthquake insurance because they think it’s too expensive compared to other types of property insurance and because the deductibles are very high. Prices climb even higher if your home is in a high-risk area or is made of brick or concrete. “Earthquake insurance is there for very serious damage or total destruction of your home,” said Karl Newman, executive director of the Washington Insurance Council. “The high deductibles keep premiums lower and help make the coverage more affordable. The prices reflect the cost to rebuild a large number of severely damaged homes.” Home insurance for fire and theft comes with relatively low deductibles for both home and contents ranging from $250 to $500. Earthquake insurance deductibles range from 10% to 25% of the total value of the home or contents and usually apply separately to each coverage. For example, a wood home valued at $200,000 can have a deductible of $20,000 to $50,000. Yet if the cost to rebuild the home is the same, regardless of whether it was destroyed by fire or earthquake, why the dramatic difference in insurance costs? “With today’s professional firefighters, smoke alarms and fire extinguishers in the home, very few houses burn to the ground,” Newman said. “If your home is a total loss, the rest of the neighborhood is usually fine. On the other hand, if you’re in the wrong place in a big earthquake, your home and your whole neighborhood are gone.” Newman emphasized that insurance works on a cost-sharing principle. “Policyholders pay premiums to share the cost of large losses with each other. The concept is ‘If your home goes this time, we’ll all help rebuild it. If it’s mine next time, you’ll help me.’ Insurance companies are there to determine who has a legitimate claim on the money paid in by the group.” The potential for widespread, unstoppable damage directly affects the cost to provide earthquake insurance coverage. “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,” Newman said. “When an earthquake hits there isn’t anybody on earth you can call to stop it.” Claims Phone Numbers Here is a list of the Washington Insurance Council’s member companies and their claims phone numbers. These companies represent more than 60 percent of the homeowners insurance policies written in Washington state. Allstate Insurance 1(800) 597-9001 CGU/North Pacific 1(800) 873-6742 Country Companies 1(800) 846-0100 Farmers Insurance (360) 254-3900 Grange Insurance (206) 448-4911 Kemper Insurance 1(800) 753-6737 Liberty Mutual Insurance 1(800) 633-1833 MetLife Auto & Home 1(800) 854-6011 Mutual of Enumclaw 1(800) 621-5410 Oregon Mutual Insurance 1(800) 765-3211 PEMCO Insurance 1(800) 552-7440, Ext. 7928 SAFECO Insurance 1(800) 332-3226 State Farm Insurance 1(800) SF-Claim USAA 1(800) 531-8222 Unigard Insurance 1(800) 456-1626, Ext. 5264 Western National Assurance (206) 526-5900 ### |
|
||
