Could Seattle be the target of a Natural Disaster?
Hazards of the Pacific Northwest Region
The state of Washington has a significant earthquake risk; from the Cascadia Subduction Zone, which extends from Vancouver Island to Cape Mendocino, to the Seattle Fault Zone that runs underneath Puget Sound and the city of Seattle, millions of people are at risk. Earthquake insurance is one of the main ways homeowners can protect their financial interest in their homes. Despite the great risk, it is unfortunate that only one in seven homes is covered by earthquake insurance.
Because of their proximity to hazards, it comes as no surprise that the area of concern is west of the Cascade Mountain Range, in the areas of Seattle, Olympia, and Tacoma. The Seattle Fault could do considerable damage to Seattle and the surrounding areas.
Risk is far greater than covered properties
In Washington, the risk of earthquake insured homes is barely 18% of the total fire coverage of the same residential homes. In the event of a devastating quake, 82% of the exposure would be uninsured for earthquake damage leaving millions of people financially devastated. In comparison, commercial buildings seem to be approximately 85% insured. These figures as reported by the Washington State Department of Insurance show that only a segment of the population are buying earthquake insurance.
The majority of the insured homes are situated west of the Cascades and also the covered homes are for the most part those valued considerably higher than the median price of homes in the region. Economics seems to be at play again here; the industry is urging more homeowners to buy earthquake insurance as this would more evenly spread risk thereby reducing premium rates. The raw truth is that earthquake insurance is perceived as a long-term investment, a luxury security instrument and many gamble the odds of simply waiting another year.