Seismology & Synchronicity

It’s started again. Yep, suddenly everyone wants earthquake insurance. After the 6.8 shakeup in Seattle, who wouldn’t?

Like most people who have some kind of friend or relation within 100 miles of Seattle, I called my aunt in Snohomish as soon as I heard the news. She could only talk for a second as her phone was ringing off the hook, but she reported that it was “the scariest thing I’ve ever been through.”

Seattle residents had a taste of many Californians’ worst nightmare, and they didn’t like it much. Newspaper reports show that Washingtonians dived for the phones in the days following the quake, although they met with little success in the scramble for coverage. Homeowners within 100 miles of the epicenter are out of luck for at least 30 days after a quake, and if their houses are brick—as many Northwest homes are—they’re even more unlikely to get a policy.

Seismologists are now saying the city got off easy due to an unseasonably dry winter. A few more inches of rain, and residents could’ve been dealing with all manner of liquefaction, structural failure and potentially catastrophic landslides. Seems like we’ve switched roles here—not only is Seattle getting California’s nice, sunny weather, but now our quakes too.

Synchronicity fan that I am, I found it interesting that the quake occurred on the same day that the fate of the beleaguered California Earthquake Authority was being deliberated at a Committee hearing in Sacramento. How well would our market have handled that little temblor?

Just fine, if you ask CEA expert Mark Leonard. “The hearing confirmed the Tillinghast report conclusion that the short-term solvency of the CEA is not in question. Our claims-paying capacity is as good as or better than that of the private insurers.”

On the same morning, the state auditor released its report on the CEA’s reinsurance. “Just like every other independent entity that’s looked at the CEA in the last year and a half, they found no problems, and in fact, that we’re doing quite well,” Leonard said. However, he noted that several of the board members talked about examining the need to change the structure of the governing board—”perhaps a model more like the State Comp Insurance Fund would be appropriate.”

That fateful Wednesday was also the same day that the CDI embarked on Phase 6 of its Earthquake Retrofit Grants Program in Monterey and San Benito Counties. The program, launched in 1996, gives low-to-moderate income households a shot at receiving a grant to pay for the retrofitting of their homes.

At 10:54 a.m., when the quake occurred in Seattle, Leonard got the newsflash on his pager, and the Chairman announced the quake to those at the hearing. I’m sure more than a few agents left the room to hit the phones; first to call relatives, then to start selling quake policies.