Monthly Archives: February 2014

Considering Earthquake Coverage on the Olympic Peninsula

When most people think about the possibility of earthquakes, California likely comes to mind.  However, the danger of earthquakes exists in many areas of the United States.  On the Olympic Peninsula, we live near to an area known as the Cascadia Subduction Zone.  This zone is a 680-mile long stretch of colliding land mass 50 miles offshore of Oregon, Washington State and southern British Columbia.  The Cascadia Subduction Zone is capable of generating a magnitude 9 earthquake, 30 times more powerful than is possible from California’s San Andreas Fault, according to an article about dangerous earthquake hot spots on wired.com.

While many persons may be exposed to the danger of earthquake, only a fraction of such property owners carry the proper level of insurance. Basic homeowner coverage typically excludes damage from earth movement such as earthquakes and sinkholes. Without purchasing specific earthquake insurance, the only protection available for a policyholder is against limited, consequential damage.  For example, it is common for property insurance to cover a fire that might be the result of an earthquake, but not the damage specifically caused by the quake. It’s a good idea to read your policy and know the exclusions.

The cost of earthquake insurance varies depending on the type of building, its location and its age. Wood frame structures withstand quakes better than older buildings or those made of brick, and therefore cost less to insure.  The cost to insure a wood-frame home in Washington State for earthquake damage would likely cost more than would the same home located on the East Coast, because of its location.

There have been studies done on the history of earthquakes in our area, resulting in estimates or guesses as to when the next one may occur.  Interesting fast facts about the Cascadia Subduction Zone can be found at swni.org/ep/cascadia.  This article states that Chris Goldfinger of OSU, who has studied Cascadia extensively, now says he expects either a M(magnitude)8+ or M9+ quake before 2060.

While the probability of damage from an earthquake is relatively low, even in earthquake prone areas, the severity of the potential damage is very high, which makes earthquake insurance worth considering.  One of Homer Smith Insurance’s knowledgeable agents in Port Townsend (360-385-3711) or Sequim (360-683-4970) would be able to answer any questions you may have regarding earthquake coverage.

Insuring Adult Children

Policies are typically clear when it comes to determining who is covered under an insurance policy. A relative is covered, but only if they are a full-time resident of the named insured’s household.  At Homer Smith Insurance, we are sometimes asked whether or not  adult children who have recently moved into their own apartment can still be covered under their parent’s insurance policies. Often, no one considers asking an insurance professional, and an adult son or daughter may assume that, when a loss happens, coverage is available from mom or dad’s homeowners or auto policy. It usually is not, and discovering this after a loss makes matters much worse. Even if the nonresident child lives next door, a parents’ policy is not going to spread its coverage to take care of an adult child’s belongings.

Once children move out of their parent’s house, and obtain their own separate home, belongings and/or vehicles, they must obtain their own insurance.  For example, Mr. and Mrs. Jones have three children and have been insured with XYZ Insurance Co. for their house and two cars for 20 years.  Over the last 5 years their three children have moved into separate apartments, and each have purchased belongings, including a car.  In essence where there was one household when the children were at home, now there are four, and  XYZ Insurance will not extend coverage under the parent’s policies to their now independent, adult children.  The adult children will have to purchase separate policies.

Being Independently Insured

Understandably, insurance is not always a priority for adult children who are now on their own. In the beginning, there’s often a phase where the kids commute between “home base” and their new apartment or home and their property is at both locations. The new grown-ups typically have few possessions, especially possessions of high value, and this adds to the likelihood that insurance is overlooked or seen as unnecessary. However, even when possessions are few, everyone has a legal responsibility to handle the damage they accidentally cause to other people and/or other people’s property. When a child reaches adulthood, they’ve also reached the point where they need to get their own insurance.

If an adult child asks you for insurance advice, let them know that one of the knowledgeable, local agents at Homer Smith Insurance in Port Townsend or Sequim can give them personalized service and advice on the type of protection they need.