In Alaska, earthquake insurance doesn't come cheap

March 14, 2010

Linda Hall, the director of the Alaska Division of Insurance, says only 9 to 12 percent of Alaskans have insurance coverage against earthquakes. (Bill Costello/KTUU-DT)

by Christine Kim
Saturday, March 13, 2010

ANCHORAGE, Alaska -- The recent earthquakes in Haiti and Chile may have struck a long way from here, but the threat hits close to home. The Alaska Earthquake Information Center reports 20,000 earthquakes each year -- but only two insurance companies offer earthquake insurance to Alaskans.

When you buy homeowner's insurance, the policy doesn't include damage from earthquakes or floods, which has to be added as optional coverage. That's why the Alaska Division of Insurance says not many people have it in their policies.

Millions are left without homes in Haiti, while Chileans expects it will take years to rebuild their country. They're both reminders of a devastating quake that shook the Last Frontier in 1964. But if disaster strikes again, are Alaskans ready to pick up the pieces?

Linda Hall, the director of the Alaska Division of Insurance, says not many Alaskans are covered -- only 9 to 12 percent.

"People may not even realize that their homeowner's does not coverage earthquake damage unless they have a specific endorsement," Hall said. "If you're trying to place coverage, there's only three companies that actually write more than 10 percent of our personal homeowner's earthquake coverage."

State Farm says one-third of its Alaskan customers have the earthquake endorsement -- and it's not cheap.

"Most companies are aware that it's a very big risk," said State Farm agent Todd Jackson. "And it's a risk that – it's hard for us to sometimes measure what the damage could be. And you can see worldwide, and the damage is huge, and so we do our best to come up with models to see what the risk is here."

But is quake coverage really necessary? Hall says it's a personal decision, but one that can impact your future.

"I think unless people have the financial ability to pay for a loss themselves, given Alaska has the second highest number of large earthquakes, I think it's very important," Hall said.

Hall says being prepared is just as important because experts believe it's not a matter of if, but when another big earthquake will hit Alaska.

Jackson says there are things you can do to minimize loss and damage if you don't have the earthquake insurance, like bolting your home to the foundation, making sure your water heater is strapped in, and placing furniture away from windows.

In terms of coverage, he says it's best to talk things over with your agent as well to know what is covered and what isn't.

Contact Christine Kim at ckim@ktuu.com

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