The Hawaii state insurance office said the “state spent about $4.4 million on earthquake insurance in 2005 compared to about $250 million in total homeowners policies.” There are even some insurers, “including State Farm, that don’t offer earthquake insurance on the Big Island because of the frequent seismic activity.” The extent to which homeowners’ policies cover earthquake damage is burst gas lines, water damage and fires.
Even though preliminary damage estimates have reached $73 million for the Big Island and federal aid is currently being determined “such grants historically average less than $3,000 for needs, including temporary housing, transportation and death benefits.” Those property owners that were willing to pay more for earthquake insurance might also be looking at a minimal payout from insurers as “Policies typically come with a deductible of between 5 percent and 10 percent of a home's value, meaning a homeowner with a $600,000 house could be responsible for paying the first $60,000 in damages.”
How often these kinds of disasters are the kinds of things that lead to revelations of the sad state of preparedness in many areas! In Hawaii, this time, it was earthquake insurance. In another part of the country, hurricanes do the same thing. People who live in areas which are at risk need to be aware of the potential losses if they go without coverage.
Jerry
Posted by: Jerry | July 11, 2008 12:17 AM | Permalink to Comment