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Allstate dropping earthquake coverage in Washington (WA State - it's just the beginning....)
KING 5 News ^ | 5/31/06 | GLENN FARLEY / KING 5 News

Posted on 05/31/2006 8:09:54 PM PDT by paulat

Allstate dropping earthquake coverage in Washington

06:52 PM PDT on Wednesday, May 31, 2006 By GLENN FARLEY / KING 5 News

SEATTLE - A major Washington insurer will stop offering coverage for earthquakes in the state, a decision that will affect about 50,000 property owners.

Allstate insures nearly 250,000 homeowners in the state and about one in five has quake insurance.

The move by Allstate has state Insurance Commissioner Mike Kreidler concerned that other carrier may follow suit.

"I'm very concerned, because you never know, if Allstate is just the first of several that are going to take this step," he said.

Kreidler said Hurricane Katrina has the insurance industry re-thinking its exposure to mass disasters.

And when they start pulling away from those risks, they start evaluating other risks as well, including tsunami's and earthquakes.

So far, no other insurance companies in Washington appear to be following Allstate.

"We have not found a trend that our insurance companies have stopped writing earthquake insurance," said Darrin Sangar, with the Northwest Insurance Council.

KING

Marshel Lvie's Lakewood, Wash. home will no longer be insured against earthquakes unless he can find another carrier. Allstate Insurance has announced it will no longer write earthquake policies.

Lakewood homeowner Marshel Lvie got the news in a letter recently that his earthquake insurance rider would not be renewed. Lvie has been a customer of Allstate for 30 years.

"I count my blessings, but this did come as a little bit of a shock," Lvie said.

He said a quote from his agent to use a different company just for earthquakes would mean higher deductibles, higher premiums and possibly less coverage.

Customers like Lvie can shop around and don't have to stay with the company Allstate agents are now offering quake coverage through He has until the end of July, to find that important policy.

Allstate says customers buying new policies with another carrier could see the price of earthquake insurance go up, or in some cases even go down depending on where and how their homes were built.


TOPICS: Business/Economy; Culture/Society; Government; News/Current Events; US: Washington
KEYWORDS: allstate; earthquake; insurance
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1 posted on 05/31/2006 8:09:55 PM PDT by paulat
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To: sionnsar

ping-a-ding-ding!


2 posted on 05/31/2006 8:10:26 PM PDT by paulat
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To: paulat


http://www.freerepublic.com/focus/news/1641477/posts
Home Insurance Cancelled...You Too?


3 posted on 05/31/2006 8:11:31 PM PDT by Calpernia (Breederville.com)
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To: paulat

y'all just don't try to move to philly. it's already too congested here.


4 posted on 05/31/2006 8:15:27 PM PDT by kvanbrunt2
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To: Libertina; Maynerd; Bobsvainbabblings; moneypenny; Kaylee Frye; Clintonfatigued; wallcrawlr; ...
Thanks to paulat for the ping.


Say WA? Evergreen State ping

FReepmail sionnsar if you want on or off this ping list.

Ping sionnsar if you see a Washington state related thread.

5 posted on 05/31/2006 8:15:38 PM PDT by sionnsar (†trad-anglican.faithweb.com† | Iran Azadi | SONY: 5yst3m 0wn3d - it's N0t Y0urs)
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To: paulat
"I count my blessings, but this did come as a little bit of a shock," Lvie said.

I think the word "jolt" would be more appropriate in this case.

6 posted on 05/31/2006 8:15:47 PM PDT by FoxInSocks
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To: paulat

All over the world the last couple of decades you've really seen an explosion of studies of paleoseismology - dating and studying past earthquakes by digging trenches through faults, extending well beyond human written records in time.

It's proven quite valuable in identifying risk, especially in areas that have had civilized settlement for a very brief time, like Seattle, Salt Lake City - but it's clear Insurance companies are taking a look at the information and going "Holy Crap, there's a lot more risk here than I thought."


7 posted on 05/31/2006 8:16:09 PM PDT by Strategerist
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To: paulat

Good. Insurance is the biggest scam in the world anyway.


8 posted on 05/31/2006 8:17:03 PM PDT by Extremely Extreme Extremist (Conservatism is moderate, it is the center, it is the middle of the road)
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To: Calpernia

This never would never have happened if President Palmer was alive!

More seriously, I imagine this is the inevitable result of the government bailing everyone out of disaster who neglects to buy insurance. The insurance companies can bail out of a high-risk area and leave EVERYONE in the government's hands.


9 posted on 05/31/2006 8:17:13 PM PDT by GOP Jedi
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To: paulat

Ruh-roh!


10 posted on 05/31/2006 8:17:30 PM PDT by poindexter
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To: paulat

Insurance works like this...

You estimate the probability of a claim being filed and the amount of the claim, then you set your premiums such that you can make a profit even if the claim gets filed.

Now, if the probability of the claims and the amount of the claims are such that you must charge a premium that is either unreasonable (won't get customers) or insufficient, you are going to lose money.

You could always bump up the premiums of others who have less risk but then, that is called socialism.


11 posted on 05/31/2006 8:17:45 PM PDT by Paloma_55 (Still MAD as HELL!!!)
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To: paulat

Perhaps what needs to happen is to simply prohibit mortgage companies from requireing insurance.

That or simply allow mortgage companies to make loans without requiring insurance.


12 posted on 05/31/2006 8:19:39 PM PDT by longtermmemmory (VOTE! http://www.senate.gov and http://www.house.gov)
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To: paulat

what did these people expect? You cant live on the ocean front (or in a earthquake area in this case) without having consequences. Deal with it.


13 posted on 05/31/2006 8:19:47 PM PDT by stuck_in_new_orleans
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To: paulat
Just how safe are those hands, now that their limp wrists have been diagnosed?
14 posted on 05/31/2006 8:20:46 PM PDT by F.J. Mitchell (Dear US Senators, Reps. and Mr. President: Why are y'all abetting the destruction of our culture?)
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To: paulat

Maybe they know something we don't.


15 posted on 05/31/2006 8:20:51 PM PDT by fatima (Kathy in Alaska is the best.)
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To: GOP Jedi
This never would never have happened if President Palmer was alive!

More seriously, I imagine this is the inevitable result of the government bailing everyone out of disaster who neglects to buy insurance. The insurance companies can bail out of a high-risk area and leave EVERYONE in the government's hands.

How's Jack gonna fix this on a slow boat to China????

More seriously, I think you've nailed it.

16 posted on 05/31/2006 8:20:54 PM PDT by paulat
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To: paulat
So what's new? Any time that Allstate has to pay out claims, they start cancelling policies and suspend new coverage. They've done it in many states. After a while, they return. Why people are so gullible to keep buying their insurance, I'll never know.

The insurance business is the only one I know of where the companies fire their customers on a regular basis!

17 posted on 05/31/2006 8:22:46 PM PDT by Real Cynic No More (A member of the Appalachian-American minority -- and proud of it!)
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To: longtermmemmory
That or simply allow mortgage companies to make loans without requiring insurance.

I can see a lender going along with that as long as they can write you a mortgage at 25% or 30% interest.

18 posted on 05/31/2006 8:23:09 PM PDT by steve86 (Acerbic by nature, not nurture)
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To: Calpernia

When we were still paying for our house we had to have flood insurance. Strangely I don't think there was much danger of a flood here above the dam.

One of the happiest days of my life was the day we were paid off and I could tell everybody to stick it. Now we get calls every day offering us a good deal on a second mortgage.


19 posted on 05/31/2006 8:23:18 PM PDT by cripplecreek (Never a minigun handy when you need one.)
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To: fatima

All the scientific studies of the Cascadia megathrust, and also the smaller faults directly under Seattle, are public, as is the USGS seismic hazard map.


20 posted on 05/31/2006 8:24:12 PM PDT by Strategerist
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To: paulat
Really If I were an insurance company I wouldn't insure anyone living in a high risk area either, but that's just me. Eventually, if this gets out of hand there will be an outcry for the government to do 'something' and being an election year the DIMs in congress will try to REQUIRE insurance companies to insure people, and the Republicans will likely go along, and then some. Or forbid insurance companies from terminating business relationships.
21 posted on 05/31/2006 8:24:48 PM PDT by KoRn
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To: stuck_in_new_orleans
what did these people expect? You cant live on the ocean front (or in a earthquake area in this case) without having consequences. Deal with it.

"The recent earthquake which struck Kobe, Japan, resulted in the loss of over 5000 lives and millions of dollars in property. However, large parts of the United States are also subject to large magnitude quakes - quakes which could be far more powerful than the Kobe quake! Although we tend to think of California and Alaska as the places where most of our earthquakes occur, the fact is that the central U.S. has been the site of some very powerful earthquakes.

In the past three centuries, major earthquakes outside of California and Alaska generally occurred in sparsely-settled areas, and damage and fatalities were largely minimal. But some took place in areas that have since been heavily built up. Among them are three earthquakes that occurred in 1811 and 1812 near New Madrid, MO. They are among the Great earthquakes of known history, affecting the topography more than any other earthquake on the North American continent. Judging from their effects, they were of a magnitude of 8.0 or higher on the Richter Scale. They were felt over the entire United States outside of the Pacific coast. Large areas sank into the earth, new lakes were formed, the course of the Mississippi River was changed, and forests were destroyed over an area of 150,000 acres. Many houses at New Madrid were thrown down. "Houses, gardens, and fields were swallowed up" one source notes. But fatalities and damage were low, because the area was sparsely settled then."

http://hsv.com/genlintr/newmadrd/

22 posted on 05/31/2006 8:25:27 PM PDT by paulat
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To: paulat

Don't forget that the deductible on most of these earthquake plans is so high that they are almost meaningless to people who don't have a lot of assets.


23 posted on 05/31/2006 8:27:51 PM PDT by umgud (FR, NASCAR & 24, way too much butt time)
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To: Strategerist
I know Strategerist.It just seems strange.
24 posted on 05/31/2006 8:30:31 PM PDT by fatima (Kathy in Alaska is the best.)
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To: paulat

The deductible was too high anyway.


25 posted on 05/31/2006 8:31:48 PM PDT by phantomworker (And the peace of God, which passeth all understanding, will keep your hearts and your minds...)
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To: sionnsar
We read an article over the weekend that ALL insurance would go up 10% PER YEAR from now on.....did I ever tell you how much I HATE INSURANCE!
26 posted on 05/31/2006 8:32:13 PM PDT by goodnesswins ( "the left can only take power through deception." (and it seems Hillary & Company are the masters)
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To: KoRn

Washington is not a high risk; and most houses are wood frame construction, so there is quite a lot of 'give'.


27 posted on 05/31/2006 8:35:01 PM PDT by connectthedots
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To: connectthedots
Washington is not a high risk

Other than 9+ magnitude earthquakes every now and then, magma flows, volcanoes, floods including the Great Missoula, 100 mph+ windstorms that take out floating bridges, not much risk.

28 posted on 05/31/2006 8:40:57 PM PDT by steve86 (Acerbic by nature, not nurture)
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To: connectthedots
"Washington is not a high risk; and most houses are wood frame construction, so there is quite a lot of 'give'."

They know that if they go dropping coverage in DC hell will be upon them lol. If you thought they were pissed because exercising a search warrant on a congressman suspected of a felony was bad, just let them lose insurance on that $5,000,000 house they HAVE to live in while congress is in session.

29 posted on 05/31/2006 8:49:59 PM PDT by KoRn
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To: KoRn

Naw...perhaps they are heeding the recent Pat Robertson prediction about something big hitting the Northwest in the near future....that would be a bummer not to have eathquake damage covered by insurance....real estate is quite high priced in and around the Seattle area.


30 posted on 05/31/2006 9:02:52 PM PDT by tflabo (Take authority that's ours)
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To: paulat

I have Allstate, but they funnel that insurance through the state in CA.


31 posted on 05/31/2006 9:04:01 PM PDT by A CA Guy (God Bless America, God bless and keep safe our fighting men and women.)
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To: tflabo
"that would be a bummer not to have eathquake damage covered by insurance"

I really do feel for people that get dropped like that. I would hope that if this goes on too much, other small insurance companies would see a good opportunity and start selling in these places. Would be a risk, but I think it would pay off.

32 posted on 05/31/2006 9:07:38 PM PDT by KoRn
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To: paulat
Allstate is dropping "special" event insurance everywhere. Here on the Texas coast they announced they will be dropping windstorm , aka Hurricane coverage effective in the middle of September which means I have to go shop for a new carrier just for windstorm coverage. And Texas hasn't even come close to experiencing the damage and loses from Hurricanes that our friends in other states on the Gulf have.
33 posted on 05/31/2006 9:08:19 PM PDT by The South Texan (The Democrat Party and the leftist (ABCCBSNBCCNN NYLATIMES)media are a criminal enterprise!)
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To: BearWash

The only real threat is if Mt. Rainier blows. That could be devastating for the people affected. Might not be covered in most policies.


34 posted on 05/31/2006 9:16:56 PM PDT by connectthedots
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To: fatima

Mt. Rainier (rumble-rumble-rumble)


35 posted on 05/31/2006 9:31:18 PM PDT by Proud_USA_Republican (We're going to take things away from you on behalf of the common good. - Hillary Clinton)
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To: connectthedots
The only real threat is if Mt. Rainier blows.

I checked my policy... I'm covered against ash damage and lava from Rainier isn't an issue. I asked them if I was covered in case of a lahar, and was met with silence.

They had to look up the definition of "lahar" and call me back. Short answer, a lahar is considered to be a flood. So I would need flood insurance (if I wasn't at 550ft.)

36 posted on 05/31/2006 9:32:04 PM PDT by SandyInSeattle (Official RKBA Landscaper and Arborist, Duchess of Green Leafy Things)
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To: Proud_USA_Republican

Hehe:)I just think they get stats we don't know.


37 posted on 05/31/2006 9:35:00 PM PDT by fatima (Kathy in Alaska is the best.)
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To: SandyInSeattle

The possible Mt. Rainier lahar channels and past occurances are fairly well known. One extends all the way to Tacoma and Puget sound - should be easy to determine if you have any risk at all.

One thing I notice that people don't understand about Rainier is that it DOESN'T HAVE TO ERUPT AT ALL to cause a lahar that would kill thousands of people. The top of Rainier is full of hydrothermal activity, dissolving the rock and making it the consistency of cheese.

A lot of Rainier's summit is unstable and could simply fall off five minutes from now, without any eruption at all.


38 posted on 05/31/2006 9:45:10 PM PDT by Strategerist
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To: paulat

My house in Olympia was damaged in the Nisqually earthquake. Our neighborhood was close to the epicenter. A house up the block was one of the handful that was totally destroyed.

That was something. I walked through downtown Olympia an hour or so after the quake. I will never forget watching the cops out with their dogs looking for people who had been squished under the large piles of fallen rubble. By some miracle, no one was.

Fortunately, I had earthquake insurance. The insurer claimed my policy had a deductible of 10% of the value of my house. I copied my policy and sent it to them, showing them that they had left the little space where they were supposed to put that information blank. According to the fine print on the policy, that meant the deductible was really only $500.00. The insurer grumbled, but payed.

My family had to live elsewhere for a couple of weeks while the contractor fixed the house. The insurer paid for us to rent a condo on the beach in Ocean Shores. Worked out great.

I figure our area is probably safe now for 20 or 30 years. . . .


39 posted on 05/31/2006 9:55:59 PM PDT by TheConservator (Confutatis maledictis flammis acribus addictis. . . .)
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To: paulat
I just bought earthquake insurance on a new house in Washington State. The company selling me my homeowner's insurance offers an earthquake policy through a company in California. The cost of the policy seemed reasonable enough to offer protection in case of the big subduction zone earthquake that is expected at some unknown point in the future.

But there's a catch. There's a 15% deductible. But that's on the total cost of the home, not on the cost of the damage.

I noticed that another insurer offered an earthquake policy from the same place. The agent from this other company misstated the true nature of the deductible.

40 posted on 05/31/2006 9:58:25 PM PDT by wideminded
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To: TheConservator
I figure our area is probably safe now for 20 or 30 years. . . .

Unfortunately, it isn't. And either a Cascadia Megathrust (which may or may not be "due" which is an overused term anyway) or an earthquake of similar size on a much shallower local fault would easily do upwards of 100 times more damage than Nisqually.

41 posted on 05/31/2006 10:07:50 PM PDT by Strategerist
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To: BearWash

or just require a larger deposit

or require a specfic portion of the collateral to be unencumbered.

They do similar loan policies to do loans without income verification.

some reasonale solution will have to develope if there is no insurance avalable at all.


42 posted on 05/31/2006 10:15:29 PM PDT by longtermmemmory (VOTE! http://www.senate.gov and http://www.house.gov)
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To: paulat; All

We won't miss allstate:

http://www.badfaithinsurance.org/indexdetaillist.html


43 posted on 05/31/2006 10:15:57 PM PDT by proudpapa (of three.)
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To: Strategerist
"either a Cascadia Megathrust (which may or may not be "due" which is an overused term anyway) or an earthquake of similar size on a much shallower local fault would easily do upwards of 100 times more damage than Nisqually."

...well...DANG! I wonder what deductable applies if you're swallowed up in the Earth!!

But I can still get auto insurance...and the chances....

44 posted on 05/31/2006 10:18:40 PM PDT by paulat
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To: Strategerist

"but it's clear Insurance companies are taking a look at the information and going "Holy Crap, there's a lot more risk here than I thought."

I think they know the government will foot the bill in the event of a quake, so why take the risk?


45 posted on 05/31/2006 10:20:33 PM PDT by MPJackal ("If you are not with us, you are against us.")
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To: paulat

Drat - I just got earthquake coverage for the first time last year -- through AllState. What a waste of money.


46 posted on 05/31/2006 11:32:31 PM PDT by GretchenM (What does it profit a man to gain the whole world and lose his soul? Please meet my friend, Jesus.)
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To: GOP Jedi

I don't think the insurance companies care whether there is a gov't bail out or not. They are there to make money and if they don't think they can, they would leave even if there isn't a gov't bailout. But if they think they can make money, no gov't bailout is going to keep them away.


47 posted on 06/01/2006 1:43:12 AM PDT by DannyTN
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To: Strategerist

Is the Cascadia megathrust active? Or are there associated strike/slip faults which are the problem?


48 posted on 06/01/2006 1:55:46 AM PDT by Smokin' Joe (How often God must weep at humans' folly.)
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To: Smokin' Joe

It is still active, although the last great event was 1700.

http://www.pnsn.org/HAZARDS/CASCADIA/cascadia_event.html

There was a very interesting show on PBS talking about it. One of the main questions was "minute of terror" or "decade of terror".

The idea being, does the fault give a little here, then a little there, then a little more somewhere else, or
DOES IT ALL GO AT ONCE?

By checking the sediments in the deep ocean valleys offshore, they are able to map eqs. (sediment falls down from the sides of the chasms during a quake that are not normal annual depositions).

The answer is: at least the last time, in 1700, it went ALL AT ONCE. A 9.0+ quake stretching from north Vancouver island to sothern Oregon, almost the Bay area...

Rock 'n roll!!


49 posted on 06/01/2006 2:10:05 AM PDT by djf (Bedtime story: Once upon a time, they snuck on the boat and threw the tea over. In a land far away..)
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To: djf

Thanks for the link! I am unfamilliar with the geology in the area and that will help.


50 posted on 06/01/2006 2:35:48 AM PDT by Smokin' Joe (How often God must weep at humans' folly.)
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