Despite cackles from the West Coast, Americans on the East Coast (including this reporter, who was minutes away from the start of a webcast when 240 W. 35 St. began waving) were shaken (pun alert) by yesterday's 5.8-magnitude earthquake centered in Virginia. And today, a debate has begun over whether earthquake insurance is warranted in the region.
Ryan Erdman, an insurance agent at TAMRAC Insurance Group in Hunt Valley, Md., … expects to receive two types of calls from homeowners who are clients later this week. Some clients will call to ask about the cost of adding an earthquake endorsement, while others will ask if any damage they experienced is covered by their existing homeowner’s policy.
The mainstream press is echoing the sentiment, from Headline News reminding viewers that earthquake damage isn't automatically covered to the AP's exploration of the how necessary coverage is and report on the size of the earthquake insurance market by state.
In California, officials are taking the opportunity to push for policy changes around earthquake insurance during the rare national focus on domestic quakes. (A significant earthquake hit Colorado, also not known for seismic activity, hours before Virginia's tremor.)
All this should be good news for earthquake insurance carriers. The stock market blog Seeking Alpha has even picked out some that may gain already. I know I'm considering it, especially after hearing on the radio this morning that freestanding brick structures are the ones most at risk for earthquake damage in the New York area (because they are not built with the same engineering prowess as skyscrapers, nor do they have foundations as deep; in addition, they are not supported by entire blocks like rowhouses). My wife was home with our infant son when the quake struck in our prewar, brick building in Brooklyn. The swaying she described was much stronger than what I experienced in Manhattan. And after seeing damage to the Washington Monument, National Cathedral and in the epicenter of Mineral, Va., a few hundred bucks a year doesn’t sound so bad.