Homeowners on East Coast May Find Insurance Won’t Cover Earthquake Damage

[OhioChick]

Aug 23, 2011 4:50 PM ET

Homeowners won’t be covered by standard property insurance policies if there’s any damage following today’s 5.8 magnitude earthquake centered near Richmond, Virginia.

Earthquake protection is generally excluded from standard homeowners’ insurance policies, and consumers have to purchase coverage either as a separate policy or an endorsement to an existing policy, said Michael Barry, a spokesman at the Insurance Information Institute in New York.

Most people who buy coverage live in quake-prone states, such as California, Washington and Missouri, according to Janece White, a vice president at Warren, New Jersey-based Chubb Corp. (CB), the insurer of commercial property and high-end homes.

“It’s very infrequent,” that residents who live on the East Coast purchase earthquake coverage since during their lifetimes there’s never been a temblor that warranted it, White said.

More: http://www.bloomberg.com/news/2011-08-23/homeowners-on-east-coast-may-have-to-pay-for-earthquake-damage.html

[ixion]

1. Of course not

that would actually require that they, you know, give money back.

[RKP5637]

4. Yeah, insurance is a one way game, you fear, you give $, we keep $! n/t

[Renew Deal]

5. "Give money back"

What does that even mean? Give it back to who? Insurance companies?

[ixion]

11. to the people who pay for insurance policies

[MissB]

2. And now is not the time to buy it, either.

Assuming that east coast insurers are like west coast insurers, they will be unwilling to write the earthquake policies immediately after the earthquake. Give them a few months, then inquire.

We pay about $1k total per year for house insurance that includes earthquake coverage on a $500k replacement cost with a good sized deductible.

[ingac70]

9. Most insurers stop selling earthquake ins.....

in Tennessee about 10 years ago.

[murielm99]

3. We have an endorsement on our policy to cover

earthquake damage.

We live in Illinois.

We have had this endorsement for about five years. We have had some shaking here, and I don't trust the New Madrid fault. That thing is overdue to give us major trouble.

[Booster]

6. Very few people on the West Coast have earthquake insurance.

Most deductibles are around $50,000 and you have to have that on hand to even start to rebuild. My friend's house was damaged pretty bad after one and she found it was much better to take out the government loan at 2% interest to fix her house. Just another of those government programs that the Republicans hate so much. Let's see how many of them apply for this loan from the government they despise so much.

[Missy Vixen]

8. We live on the West Coast and have earthquake insurance

We wouldn't go without it.

I agree with you: It'll be interesting to see how many Republicans are now bellying up to the government trough re: "How could we have KNOWN?"

:eyes:

[TreasonousBastard]

7. I was under the impression that when you bought your homeowners...

earthquake was a fairly standard additional coverage-- like EC and VMM.

Unlike flood insurance, earthquake is cheap. Last time I checked, earthquake rates around here were $.001 per $100 of value, making it 50 bucks a year for a $500,000 house. So, if you figure you'll live in one house or another for 50 years, you'll save what, 2500 bucks over your lifetime, on something you think you don't need.

And then you complain when an earthquake hits and you don't get paid?

People wouldn't buy fire or car insurance, wither, if they weren't made to, because "It won't happen to me."

[pamela]

10. We're kind of dealing with this now...

We live in a condo. Today a pipe broke in the unit above us and saturated our walls, ceiling and floor. It is going to need major work and we will be out of our condo for weeks, maybe months. It happened around the time of the earthquake but may have been leaking before then. I was in the bedroom and heard water running in the living room and was on my way to check when the quake hit. By the time I found where the water was coming from there was already a lot there.

Our insurance for the structure is through the condo association and they are saying it is earthquake damage and that they aren't covered for that. The renter upstairs where the pipe broke called his insurance co and they said to call the condo owner. No one can reach her but her insurance probably won't cover earthquake damage either. We don't have insurance on the contents of our condo-just flood insurance and the insurance for the structure through the condo association. Our contents were mostly undamaged anyway because I was able to get stuff moved pretty quickly and got the water shut off before it got too deep. We had a disaster restoration company in and they pulled up all the carpet and said we would need to have major work done on the drywall and possibly have wiring and the AC replaced. Plus we need to get most of our stuff moved out so they can work and we need to find a plae to live. We're in a motel room tonight.

I could use advice. We'll probably have to contact a lawyer but if anyone could give me some suggestions for how to handle this, I would appreciate it. How can we tell if this broken pipe was even caused by the earthquake? The timing seems to suggest that it at least made it worse but I think there may have been a problem before the quake hit. This isn't the first time there have been water problems in the unit above us that leaked into ours. My second question is: Why would any of this be our responsibility?? Our pipes are fine, we just had water gushing in from the neighbor. It was her broken pipe and and flooded condo that spilled over into ours. I did a little checking on the internet and broken pipes aren't usually covered by insurance anyway because it is almost always due to negligence. Evidently properly maintained pipes don't break.

I don't know how clear this is or if there are typos or grammar errors. I'm pretty shaken. Advice or suggestions (or sympathy) is welcomed.

[Chan790]

12. Okay, There is a lot there.

1.) Call your insurer. Even if it's not covered and it's almost certainly not covered, they can at-least advise you on next steps because they want to keep you as a client.

2.) Call a lawyer. You're probably going to have to sue the unit owner above you because she's legally responsible for the maintenance and upkeep of her unit and that includes her pipes. You may also have to sue the occupant as the damage may result of his negligence (that will likely be the owner's defense unless she's an utter idiot). Possibly the condo association too if some portion of this falls under their responsibility. Call the lawyer though, it's their job to figure out these things.

3.) Document everything. Write it down. Take statements. Gather documents such as a history of the previous water incidents. Hold on to every receipt and notice for everything including storage costs, repair costs, damage estimates, replacement costs of items. Take pictures. Do it now and keep doing it as time goes on. Things get repaired. Things get lost. Standing water evaporates. Stains appear. Mold grows. Neighbors move away. People forget details. Time is not your friend what it comes to documenting damages and losses from the fault of others.

Sorry. This isn't going to be fun...you're the not-at-fault party here and that means you stand a fairly good chance of being compensated if you stick to it and raise hell.

[pamela]

13. Thank you so much.

This is very helpful. Sorry I didn't answer sooner but we've been at the condo all day packing stuff up and moving it to a storage unit. It was hot and exhausting but we are staying in pretty good spirits. We were very lucky that none of our possessions were damaged but that's mainly due to my quick action if I do say so. :) I grabbed buckets and plastic containers and towels and was able to catch a lot of water from the biggest leaks and called for help really fast to get the water turned off. Everyone has said if I hadn't been there the whole building would have flooded. One of the first people that responded was the condo association President and he came over this evening and said he would sign an affidavit or do whatever if we had any problems with the other owner's insurance.

Her insurance adjuster is coming tomorrow so I'll see what he says. She seems to understand that this is her responsibility. She said a few little things that concerned me like "are you sure it wasn't your air conditioner?" I've been really nice and pleasant so far but I put a stop to that line of reasoning real quick. We have lots of witnesses that saw that it was her broken pipe that was flooding her unit and ours. Her tenant has been great. He called his insurance immediately, mainly to try to help us and he kept calling and calling her yesterday. She finally showed up this afternoon and gave me the number for the insurance claim and adjuster, etc. I'm not going to get ugly yet but I'm teetering on the edge. Right now I just want them to be fair and fix the damage and pay for our expenses with storage, moving and accommodations.

Anyway....sorry I wrote so much. I'm doing ok. My husband has been great, too. We had just gotten back from a long trip the night before so we were exhausted before this even started. We were lucky this didn't happen 24 hours earlier.

[sarcasmo]

14. Florida folks know a bit about this topic.