Assessing Earthquake Risk
Your typical home policy covers damage caused by fire, a tree falling on your house, or a pipe bursting. But what about earthquakes?
One thing I’ve found frustrating both as a consumer and as an insurance agent is how hard it seems to get good information on earthquakes. For our area, most people say, “yeah, there is going to be an earthquake. Who knows when?” Which is true but also unhelpful for those of us who want a tad more information. It turns out there is a lot more that can be reasonably said about earthquakes here in Oregon. I’ve included the best of what I’ve found.
How likely is it?
Experts seem unified in saying an earthquake will happen. According to Oregon.gov, scientists give a 37% chance of a major earthquake in the next 50 years.
How bad will it be?
Experts also seem unified in saying western Oregon and Washington has unusual potential for a devastating earthquake. That is because Oregon and Washington are tied into what scientists call the Cascadia Subduction Zone. Kathryn Schultz wrote an informative and prize-winning piece on this in 2015 as well as a brief follow up (mostly focusing on Seaside, OR). In short, a Cascadia quake has the potential to cause massive earth movement over a very wide area.
What about where I live?
Go ahead and look. The Oregon Department of Geology has put together a very useful interactive hazards map (HazVu) that shows the areas most likely to be impacted and how badly. Once you’ve entered your address, you can choose different “Layers to Display.”
There are three main layers to pay attention to on the HazVu map:
First, the “Cascadia Earthquake Hazard” layer allows you to see the expected shaking:
In general, you can see that it will be most severe along the coast, strong in the Willamette Valley and Portland Metro areas, and moderately strong as you move over the mountains to eastern Oregon. One glance and you can see that our areas in Washington, Multnomah, Yamhill, and Clackamas Counties are quite patchy. That’s because the risk can vary quite a bit depending on local features; so, look up your specific address.
For example, the expected shaking for my address is expected to be “Very Strong” but not “Severe” or “Violent.” How about yours?
When an earthquake does happen, the most significant damage is often due to liquefaction or landslides that are caused by an earthquake. And you can check both of these on the map as well!
Second, check the “Earthquake Liquefaction” under “Earthquake Hazard” layer.
Liquefaction is when your soil temporarily moves into a liquid state because of shaking, which as you might guess is not good for your foundation. Thus, you’ll notice much of the liquefaction risk correlates in part to places where there tends to be more water. For instance, I live near a creek, and so my home’s risk is a bit higher.
For example, the Liquefaction Hazard for my address is “Moderate” to “High.” How about yours?
Finally, check the “Landslide Hazard” layer.
This gives you an idea of how likely sliding is in your area.
For example, I now know that the Landslide Hazard for my address is “Moderate” to “Low.” How about yours?
Between the earthquake, liquefaction, and landslide hazards you can see a general assessment of the risk to your property based on general geographic features. You know more than you did before!
To sum up my property, I know that the landslide hazard for my property is low, with a moderate risk of liquefaction, and a good chance of strong shaking.
What doesn’t this HAZVU map tell me?
This tool does not tell you how resistant your home structure is to damage on your specific land. For that level of information, you’ll need to hire a geologist to survey your property.
In general, older homes are more susceptible to earthquake damage as the building codes have incorporated new requirements that help homes be more resilient. In general, the two most significant changes are the bolting of the home to the foundation and the strapping of the water heater.
If these updates have not been done, there are earthquake retrofitting companies in the area that specialize in making your home more resilient. In short, spending five or even twenty grand now may be a tough pill to swallow, but if there’s a decent chance it can prevent more severe damage, it may be worth it.
If you’re looking for thoughtful information as it relates to specific building types here in the Portland metro area. BJ Cure, a structural engineer specializing in earthquake resilience, has written the most informative blog I could find anywhere here in the Pacific Northwest.
So, finally, what about that earthquake insurance?
In short, if an earthquake causes major damage, you’ll be glad you have it.
There are a few key things to know.
Earthquake insurance policies have a large deductible. Though earthquake insurance deductibles can sometimes be found for as low as five percent, 15% or 20% is now typical. Thus, the damage needs to be big for the policy to kick in.
What does that mean practically?
Take an example of a typical home here in Hillsboro or Beaverton. Let’s say your home structure would cost about $500,000 to rebuild, and so you pay $475 for $500,000 of coverage with a 15% deductible.
In other words, your deductible is $75,000 (gulp!) and so, in the event of an earthquake, you’d be responsible for the first $75,000 of repairs. BUT, after that $75,000 the insurance company is on the hook to cover reasonable repairs to get your house, up to $500,000.
In other words, if a big earthquake has bent your house all out-of-whack, you’ll be glad for the coverage. For instance, if contractors estimate it’s going to cost $175,000 to get your house repaired, you’d be glad to know that the last $100,000 would be paid for by the insurance company.
How much does earthquake insurance cost here in Oregon?
Most earthquake policies I see here cost $400-$700 annually, but the reality is that the cost is dictated by a range of factors and can ranging from $250 all the way up into the thousands. The best way to find out is to request a quote on the coverage and pay attention to that deductible amount. Some companies will simply add a rider to the home policy while others may provide a standalone policy, but at least you’ll know the exact cost.
What if my home is older?
It’s important to know that if your home is older, like mine, you may need to do a little legwork to be eligible for the insurance. There’s a good chance that the insurance company will ask for proof of retrofitting or pictures of certain mitigation measures, like that strapped water heater.
So, should I get earthquake coverage here in Oregon or Washington?
If the cost of the policy doesn’t impose a financial hardship on you, I say get it if you can. After all, your home is probably your biggest single asset.