Tsunami
Last weekend, we experienced a tsunami warning in Hawaii. The 8.8 magnitude earthquake in Chile was the cause of the warning. The whole state of Hawaii went through the drill. Some people stocked up on gas, groceries and water. Others moved to higher ground to avoid the potential waves.
All in all, I thought everyone handled the situation well. From the newsrooms to the tsunami warning center to the people of Hawaii, everyone stayed calm and informed. I heeded the advice to stay home and prevent potential traffic jams. I think it was extremely fortunate that the warning was on Saturday. If I remember correctly, the last tsunami warning was on a weekday, and the traffic was horrendous.
The actual tsunami turned out to be nothing more than a 1-2 foot surge. But what if a larger tsunami hit the islands? Would your homeowner’s insurance policy cover losses from a tsunami? Unfortunately, like earthquake losses, you would need to get separate coverage to cover flood (tsunami) losses. Flood coverage is provided through the federal government under the National Flood Insurance Program. Like earthquake insurance, flood insurance is very expensive. For the most part, only homes close to the shoreline or close to a water source (river, stream or lake) are required to purchase flood insurance.
If you have any questions about flood insurance, feel free to ask me.
Earthquake Insurance
In the wake of the tragic Haiti earthquake, you may wonder what would happen if an earthquake struck closer to home. Would your homeowner’s insurance policy cover your home if it was destroyed by an earthquake? For most homeowners, the answer is “no.” Unfortunately, the standard homeowner’s insurance policy excludes earthquake losses. Similar to a flood risk, earthquake is considered too high of a risk to be covered by standard rates.
Liberty Mutual is one of the few companies that offers earthquake insurance in Hawaii. However, very few of our policyholders choose to add this coverage to their policies. The premium is quite expensive and the deductible is very high.
Read the following article for safety tips and more on earthquake insurance:
Consider Buying Earthquake Insurance
Images of desperation and despair continue to pour out of Haiti in the wake of its devastating earthquake last month, killing over 200,000 people and directly impacting over 3 million of its people. This earthquake also serves to remind Americans of their exposure to this peril as well. Records dating back to 1900 reveal that earthquakes have occurred in all 50 states and caused damage in 39 of these states. The Federal Emergency Management Agency (FEMA) released a major study in 2000 indicating that U.S. earthquake losses over time could average $4.4 billion a year.
So the following question naturally arises: what is your exposure to an earthquake? Research indicates that residents in California, Oregon, and Washington are most at-risk. However, parts of Arkansas, Illinois, Indiana, Kentucky, Mississippi, Missouri, and Tennessee are also quite exposed to earthquakes. The New Madrid Seismic Zone runs under these states and, though it occurred long ago, gave rise to one of the largest magnitude earthquakes to ever hit the United States.
If you live in any of these states, you should ascertain your proximity to an earthquake fault zone. California residents can determine their exposure by visiting the State of California’s Department of Conservation Web site, which provides a list of affected cities and counties. For other state-specific information, visit the U.S. Geological Survey Web site.
Most homeowners policies specifically exclude earthquake losses, just as they do flood losses. Therefore, if you live near an earthquake seismic zone, consider purchasing a separate earthquake policy or an earthquake endorsement attached to your homeowners policy. In addition, the following are some steps to take that will reduce your chances of injury or property damage resulting from an earthquake.
- Verify that operational fire extinguishers are strategically located on each floor of your home.
- Anchor tall furniture, refrigerators, water heaters, and bookcases securely to the walls.
- Utilize flexible connectors for gas supply to gas-fueled appliances.
- Keep beds away from glass or any hanging object that might fall.
- Verify that your home’s roof and chimney are well-maintained, with proper support.
- Apply safety film to windows and glass doors.
- Add anchor bolts or steel plates between the home and its foundation.
- For older homes, work with a civil engineer or city building department to verify that your home is up to code for the earthquake peril.
- Communicate to family members an emergency meeting place should your family get separated during an earthquake.
If you are in your home when an earthquake occurs, stay inside and move away from windows, skylights, doors, and objects that might fall. Crawl under a sturdy item such as a large table or desk. Stay where you are until the shaking stops.
Get more personal lines insurance and risk management tips and ideas from IRMI.
Copyright 2010
International Risk Management Institute, Inc.
