January 26, 2001

FOR INFORMATION:
Mary Bonelli/Mitch Wilson - OII - 614.228.1593
(After hours: Mary - 614.443.0400 or /Mitch - 614.868.0575)
Michael C. Hansen - ODNR - 740.548.5979

EARTHQUAKE INSURANCE OPTION AVAILABLE TO OHIOANS

COLUMBUS - The Ashtabula-area earthquake Thursday evening may leave some homeowners wondering whether such losses would be covered by their insurance. Measuring 4.6 in magnitude, it's estimated that there has been some damage to local homes and businesses.

The Ohio Insurance Institute (OII) reminds property owners that damages caused by an earthquake are normally excluded under most homeowners or renters insurance policies, although some "preferred" homeowners policies may include this coverage.  Most insurance companies offer earthquake protection as an add-on coverage by endorsement.

The endorsement covers building and contents losses sustained by earthquakes.  Earthquake coverage carries a special deductible, normally ranging from 5 to 10 percent of the insured amount.  This deductible applies separately to the home, other structures - like a detached garage - and personal property.  Coverage for the cracking of bricks, mortar or stucco may be excluded, depending on how the endorsement is written.

"For example, if you have your home insured for $100,000 and your earthquake endorsement carries a 5% deductible, you would be responsible for covering the first $5,000 of damages to your home as a result of an earthquake," said Daniel J. Kelso, OII president.   "The reason that earthquake coverage has its own deductible is that it's designed to protect against catastrophic, rather than smaller losses."

According to the OII, coverage costs vary depending on the type of home or building.  It costs less to insure frame structures against earthquakes than masonry buildings, since frame structures have some 'give,' and are better able to withstand tremors.

Kelso noted that the cost of an earthquake endorsement in Ohio is quite reasonable, especially compared to earthquake-prone regions of the U.S.  Estimates range from about $23-$55 annually for $100,000 in coverage, with such factors as the type of structure and region of the state coming into play.

The Ohio Insurance Institute is a trade and public information association representing insurance companies and agent groups for the property/casualty insurance industry.  A primary objective of the OII is to help Ohioans achieve a better understanding of insurance and related safety issues.

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Ohio earthquake/seismic risk activity information is available online at www.dnr.state.oh.us/odnr/geo_survey