Seattle Temblor May Heighten Awareness of Earthquake Coverage

The temblor that hit the Seattle area Wednesday may cause more Californians to think about buying earthquake insurance, but the 6.8-magnitude shaker shouldn’t otherwise affect policies or rates here, insurance officials said.

Inquiries about earthquake insurance are likely to increase because the event was close enough to California “to be in people’s realm of consciousness,” said Candysse Miller, executive director of the Insurance Information Network of California, a trade group for property and casualty insurers.

Recent earthquakes in El Salvador and India failed to provoke Californians to sign up for coverage, insurance officials said. About 17% of Californians have earthquake insurance, compared with about 28% before the Northridge earthquake in 1994, Miller said.

“The longer we go without an earthquake, the more people drop it,” she said.

About two-thirds of California’s 1.2 million earthquake policies are written through the California Earthquake Authority, a state-run pool. Rates are based on homeowners’ locations, soil type and housing structure and would not be affected by an out-of-state quake, said CEA spokeswoman Nicole Winger. The average annual premium for earthquake coverage in California is $558 for a $200,000 home, down from $658 in 1996.

Policies offered by both the pool and private insurers tend to be less generous than those offered before the Northridge earthquake, which caused more than $12.5 billion in insured losses and which nearly bankrupted one insurer, 21st Century.

Policies in California typically have high deductibles--10% to 15% of the home’s insured value--and exclude pools, fences, outbuildings and other structures outside the home.

Insurers in Washington and elsewhere have also taken steps to reduce their exposure to earthquake damage, said Karl Newman, executive director of the Washington Insurance Council, another trade group.

After Northridge, most Washington insurers increased their insurance deductibles or switched to bare-bones policies that are prevalent in California, Newman said.