Property/casualty insurers will pay $330 million to homeowners and businesses for insured property damage from the earthquake that struck Seattle and nearby areas of Washington and Oregon, according to preliminary estimates by Insurance Services Office’s Property Claim Services unit.
The Feb. 28 catastrophic earthquake measuring 6.8 on the Richter scale generated 13, 550 claims for insured damage to personal and commercial property and automobiles, according to ISO’s survey of insurers.
ISO’s PCS unit defines a catastrophe as an event that causes $25 million or more in insured property losses and affects a significant number of property/casualty policyholders and insurers. The lion’s share of the losses from the recent earthquake – $315 million – was in Washington.
Gary Kerney, director of ISO’s PCS unit, cited several reasons insured losses fell well below early insured damage estimates that exceeded $1 billion.
“Many earthquake-policy endorsements provide for deductibles equal to 10 percent or more of the policy limit,” said Kerney. “What’s more, earthquake coverage may only apply to less than one-quarter of the buildings in areas that were affected by the earthquake.”
Because of the nature of earthquake damage and the likelihood that all damage has not been assessed in the days immediately after the earthquake, PCS will conduct another survey of insurers in 60 days.
The PCS estimate represents anticipated insured loss on an industry-wide basis arising from catastrophes, reflecting the total net insurance payment for personal and commercial property lines of insurance covering fixed property, personal property, vehicles, boats, related property items, business interruption and additional living expenses. The estimates exclude loss-adjustment expenses.
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