Earthquake insurance considered Homeowners seek protection against 'Big One'

March 19, 1993|By Frank Langfitt and James M. Coram | Frank Langfitt and James M. Coram,Staff Writers

As the earth beneath Howard County settled down for the first time in nine days, local insurance companies continued fielding calls from nervous homeowners requesting information about earthquake coverage.

County insurance agents say they've been receiving anywhere from a handful of inquiries to as many as 60 a day. The Doug Mays Agency in Columbia, for instance, has averaged 10 to 15 calls daily, said office manager Pat Ipri.

Joan Duffy, an agent with Cugle & Hann Insurance Associates, paid $49 for a year's earthquake insurance on her frame house in Ellicott City. "It's better to sleep easy at night," she said.

The insurance rush has been spurred by six minor earthquakes that began March 10 in Columbia. The quakes have registered from magnitude 1.0 to 2.7 on the Richter scale. No injuries or structural damage have been reported.

Scientists say the likelihood of a major earthquake striking the Baltimore area is very low. The last major quake to hit the East Coast was a 7.7 jolt in Charleston, S.C., in 1886.

Still, many residents would rather pay a little now than take a chance on paying a lot later.

Earthquake insurance isn't normally included on policies in Maryland but can be attached at the homeowner's request. Premiums vary depending on location, the type of home, its value and the deductible, according to Tim Dove, a spokesman for the Insurance Information Institute in Washington.

Earthquake insurance in Maryland tends to come with low premiums and high deductibles. A $100,000 wood frame house might cost $40 a year to insure, for instance. Another home worth $250,000 could run $200 or more, depending on its construction, Mr. Dove said. Deductibles range from 2 percent to 10 percent of a home's value, he said.

"They aren't going to pay off if a couple of dishes go flying," Mr. Dove said. "They're guarding against the proverbial Big One."

By contrast, the standard deductible on a regular homeowner's policy for a house valued over $100,000 is about $250.

Earthquake insurance is based in part on the type of structure. Brick or stone houses cost more to insure because they are more susceptible to damage, while wood frame houses like Ms. Duffy's cost much less.

Ken Williams, a Prudential agent in Columbia, said premiums can run more than $300 annually for a $150,000 masonry home.

Each year, Americans spend about $634 million dollars for earthquake insurance, Mr. Dove said. More than 70 percent of that insurance is sold in California, where 20 percent of the homeowners carry it.

Earthquake insurance costs four to five times more for a house in Los Angeles or San Francisco than it does for a similar home in Howard County, Mr. Dove said.

Not everyone in Howard County is buying protection for their homes.

Donald R. Howell is battalion chief of the Howard County Fire Department. He lived through a minor tremor at his home in Lisbon several years ago, but has no intention of buying earthquake insurance.

"I feel this is a low-level, natural phenomenon," said Mr. Howell, who emphasized that he was speaking as a private citizen. "I probably have a better chance of my house catching on fire."

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