American Property Casualty Insurance Association
  • Staff Contact: Nicole Mahrt-Ganley     
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Contact:

Nicole Mahrt Ganley

Phone:

916-440-1116 or 916-616-5855

Email:

Nicole.mahrt@pciaa.net

 

 

FOR RELEASE ON RECEIPT

October 16, 2014

The Great Shakeout 2014: PCI Asks Homeowners and Renters… Are You Financially Ready for an Earthquake?

SACRAMENTO — As millions of Americans participate in the Great Shake Out earthquake drill to physically prepare for an earthquake, the Property Casualty Insurers Association of America (PCI) reminds Americans to assess their earthquake risk as part of financially preparing for disasters.

Earthquakes are the least predictable of potential disasters with active seismic zones reaching from Alaska to Maine.  Today’s drill provides an opportunity to join millions of other people around the globe in the largest annual earthquake drill in the world and practice “Drop, Cover and Hold on.”

“Disaster preparedness includes getting your family’s property and finances in order. An essential part of financial preparedness is understanding your insurance policy and knowing what is and what is not covered,” said Christopher Hackett, PCI director of personal lines policy. “Coverage for earthquake damage must be purchased as a separate endorsement to a homeowners policy or in California coverage may be purchased as a separate policy from the California Earthquake Authority."

PCI encourages everyone to be prepared for earthquakes. With population growth in areas of intense seismic activity, the risk of catastrophic loss of life and property damage continues to rapidly increase. According to the Federal Emergency Management Agency it is estimated that a major earthquake in a highly populated area of the United States could cause upwards of $200 billion in losses. Despite facing this major risk, many Americans do not purchase earthquake insurance. For example, the latest data gathered by the California Department of Insurance shows that even in earthquake-prone California, only 10 percent of homeowners purchase earthquake insurance.

 

“The standard homeowners policy does not cover losses that result from earthquakes due to the unpredictability and widespread catastrophic nature of these events,” said Hackett. “In addition, it is important to note the standard homeowners policy also does not cover landslides, flooding, mud slides or sink holes.”

Earthquake insurance is designed to provide coverage for catastrophe losses. With earthquake insurance, consumers are protected from the damage caused by the shaking that results from the movement of the earth. The deductible for earthquake insurance varies based on the policy and the insurer. These deductibles are generally based on a percentage of the replacement value of the home. The deductible can range from two to 25 percent of the home's replacement value. In California, the standard deductible is 15 percent. However, for an additional fee consumers can now lower their deductible to 10 percent and raise the limits for contents and loss of use to $100,000 and $15,000 respectively.

“The 6.0 earthquake that hit Napa, California on August 24, 2014 causing $2 billion in damage is an important reminder of the genuine threat earthquakes pose,” said Hackett. “We hear a lot of reminders to prepare physically for earthquakes including storing food and water, bracing water heaters and bookcases, but it is equally important to talk to your agent or insurance company and assess your need for earthquake insurance.”

Learn more about the Great Shake Out:

http://www.shakeout.org/

How to Be Financially & Physically Prepared:

Be Financially Prepared:  Talk to your agent or insurance company.   Assess your risk and consider purchasing earthquake insurance.

Make a Kit: Make an emergency preparedness kit with food, water and medications.  Remember to consider the needs of seniors, children and pets.

Stay Informed: Keep a radio and fresh batteries on hand.

Make a Plan: Prepare a family evacuation plan, where to go and who to call.  Plan what to do if your family gets separated.

Make an Inventory: Take an inventory of your personal possessions.  Make a list or take a video of each room in your house.

Secure Furniture: Avoid hazards, secure large objects that could fall and hurt residents during an earthquake.

 

TEN COSTLIEST EARTHQUAKES IN THE U.S.

(millions of 2011 dollars) (Napa 2014 quake not included)

 

1.    January, 1994             Northridge, CA            $23,260

2.    April, 1906                   San Francisco, CA     $  4,100

3.    October, 1989             Loma Prieta, CA         $  1,745

4.    February, 2001           Olympia, WA              $     380

5.    March, 1964                Anchorage, AK           $     325

6.    October, 1987             Whittier, CA                 $     150

7.    April, 2010                   San Diego, CA            $     105

8.    September, 2000        Napa, CA                    $       65

9.    October, 2006             Hawaii                         $       55

10.  December, 2003         Paso Robles, CA        $       50

 

PCI promotes and protects the viability of a competitive private insurance market for the benefit of consumers and insurers. PCI is composed of more than 1,000 member companies, representing the broadest cross section of insurers of any national trade association. PCI members write more than $210 billion in annual premium, 39 percent of the nation's property casualty insurance. Member companies write 47 percent of the U.S. automobile insurance market, 33 percent of the homeowners market, 36 percent of the commercial property and liability market, and 39 percent of the private workers compensation market.

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