Fewer than one in five homeowners in the West carry earthquake insurance, according to an insurance industry survey. That would set back our region's recovery if the Big One were to hit tomorrow.
Now both Oregon and Washington state are looking to California for a possible solution to get their numbers up.
Earthquake insurance is an optional add-on to homeowner's coverage. Oregon State Resilience Officer Mike Harryman said there are many reasons consumers skip buying it: It's expensive, deductibles are typically quite high, your primary carrier may not offer it, and big earthquakes are rare.
“I think all of the above,” Harryman said.
"It’s something that we try to educate consumers about, but it’s a product that is a tough sell to many consumers," said Kara Klotz, a spokesperson for the Washington State Office of the Insurance Commissioner.
Harryman on Tuesday helped launch a new work group created by the Oregon Legislature to explore how to lower the barriers.
"What we would like to do is do a deep dive and look at the California Earthquake Authority model,” Harryman said.
That state-supervised, not-for-profit insurance provider takes credit for lowering rates and increasing availability. But still, the popularity of earthquake policies in California hasn't budged much.
The Oregon Legislature's charge to the earthquake insurance work group is to report to the governor's office in just over a year from now on alternatives for providing adequate earthquake insurance coverage for residential property owners. The unanimously-approved measure setting up this task force included the caveat that the group should not recommend establishment of "a state-run insurer."
This work group and another one launched simultaneously to address mass care and mass displacement after a Cascadia megaquake are being managed by the Oregon Seismic Safety Policy Advisory Commission.
"We'd also like to look at incentives that California does for their homeowners in areas that have the highest risk for earthquakes," Harryman said.
In Washington state, the Resilient Washington Subcabinet convened earlier this year by Gov. Jay Inslee is examining, among many other things, whether to create its own task force to consider developing a state-managed earthquake insurance program similar to California's.
Some homeowners and renters assume the federal government would bail out property owners who lose everything in a major catastrophe. Not necessarily so.
"We can't always be dependent upon FEMA coming in and doing everything for everybody," Harryman said. "They can help kick-start some stuff. They can help us with that initial short term recovery. But long term recovery is really going to be on the region. It is going to be on us Oregonians."