Earthquake Basics in Oregon
Earthquake insurance operates in a similar way to your home insurance here in Oregon.
Like your regular home insurance policy, the earthquake policy typically provides coverage up to a certain amount for your home, your other structures, your personal property, and your additional living expenses if you can’t live in your home after an earthquake.
If an earthquake caused you losses for your home, other structures, property, and made your home unlivable, the policy will provide coverage after the deductible.
But the size of the deductible is one critical way that your earthquake policy differs from your regular home policy.
Earthquake Deductibles are Different.
While your regular home policy probably has a deductible from $1,000 to $10,000, your earthquake policy has a deductible that typically ranges from 5% to 25%. But 5% to 25% of what?
Earthquake policies vary significantly in how they answer that question and it’s important to know how.
For the sake of illustration, we’ll simplify and say your earthquake policy has a 20% deductible with the following coverage limits.
- $500,000 for your home dwelling
- $50,000 for detached structures
- $100,000 for your personal property
- $100,000 for additional living expenses
Different Ways Your Earthquake Deductible Might Apply?
- Some policies will apply the deductible once as a percentage of dwelling coverage. So that means your 20% deductible will be $100,000 and then the policy will begin paying for repairs, property, and additional living expenses up to the relevant limits.
- Others will apply the deductible separately by each line of coverage. So your 20% deductible would be $100,000 for the home repairs, $10,000 for detached structures, $20,000 for your personal property, and $20,000 for your additional living expenses.
- Some policies add up all the coverages in the policy and apply the deductible to that total amount. In the above example, that would be $750,000 of coverage but the 20% deductible would be $150,000. After you’ve covered that amount of repairs, the policy will provide up to $750,000 wherever it’s needed.
Is it worth getting an earthquake policy here in Oregon?
I’ve put together a full page on how to better get a handle on the earthquake risk for your Oregon property. Click “Assessing Your Earthquake Risk” if you want to check it out. The short of it is that from the Willamette Valley up through Portland and to the coast is part of the Cascadia Subduction Zone, an area which scientists say will eventually experience a catastrophic event. (If I knew when, I’d tell you.)
If you have a home and an earthquake does happen, you’ll be glad you have it.
There are other important questions to ask about your policy. What level of building ordinance coverage will it provide? Is it at replacement cost? Does it have special personal property limits? How long does it define an earthquake event as?
Other Guides & Helps (including a video game!)
- The State of Oregon has put together a Consumer Guide to Earthquake Insurance.
- Here’s a great resource from Shake Out, a non-profit committed to earthquake disaster preparedness.
- Finally, here is an informative video game and website for disaster preparedness in the Pacific Northwest.
Contact us if you’d like to chat about earthquake options. Happy to help!