Few homeowners' earthquake damage covered by insurance ...

Hundreds of Washington-area residents are shelling out thousands of dollars to repair earthquake damage to their homes and businesses, with less than 5 percent of East Coast homeowners carrying quake insurance.

But even the insured are likely paying out of pocket for damages from Tuesday's earthquake, which measured 5.8 on the Richter scale, because quake insurance carries such a high deductible, according to insurance agents.

Earthquake insurance deductibles typically range from 5 percent to 25 percent of a property's value -- meaning that on a $500,000 home, a homeowner must pay the first $25,000 of damage.

"That catches people off guard," said Mike Brown, owner and vice president of Brown's Insurance Agency in Manassas.

Brown said none of his clients who sustained damage from Tuesday's earthquake was insured for the damage.

A California firm estimated that the quake caused between $200 million and $300 million in total damage along the East Coast. EQECAT, which helps companies calculate natural disaster-related risks, estimated that less than 5 percent of area residents are insured for earthquake damage.

The most common quake damage to buildings in the Washington region this week were collapsed chimneys and crumbled masonry outside tall buildings, agents said. With or without insurance, those relatively minor repairs could cost homeowners anywhere from a couple thousand dollars up to $10,000. Brick structures and tall buildings are more susceptible to earthquakes than smaller structures made of wood or plaster, according to the U.S. Geological Survey.

If a building sustains major damage to its foundation, it could be condemned -- which is much more costly.

Building inspectors have condemned at least four apartment buildings in Fairfax County and two apartment buildings in Prince George's County that suffered major structural damage.

Despite the relative infrequency of earthquakes in the area, insurance agent Billy Simmons said he expects to see an influx of Washington-region residents requesting quake insurance over the next couple months.

"But after the earthquake, many companies have put a moratorium on the insurance," he said, noting that the possibility of aftershocks remains high.

Brown and Simmons, owner of the D.C.-based Rust Insurance Agency, both said they have received phone calls from clients interested in adding the insurance to their homeowners' policies.

Premiums for earthquake insurance are typically pretty low in areas such as Virginia, the District and Maryland, which are much less susceptible to earthquakes than the West Coast, agents said.

But the cost can vary greatly from company to company. Brown said he recently offered a doctor in Manassas a one-year, $50 policy on a commercial building worth $2 million. That same doctor pays $1,000 annually to another insurance company for earthquake insurance on his $1 million home.

hpeterson@washingtonexaminer.com

Source: http://washingtonexaminer.com/local/dc/2011/08/few-homeowners-quake-damage-covered-insurance

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