Lack of Insurance Shakes Quake Victims

SEATTLE —  The $37,000 Lino Tagliapiatra green glass sculpture sits on a tarp among a dozen other irreplaceable works of art--a kind of triage center for the broken pieces--in a corner of one of downtown Seattle’s largest galleries.

William Traver, the gallery owner, estimates his losses at between $300,000 and $400,000. But he, like most businesses and homeowners in Seattle, does not have earthquake insurance.

“Here, we live with this constant danger of earthquakes,” Traver said Thursday. “But we can’t insure this amount of work. The artists know that, and we jointly live with that possibility.”

Most homeowners here don’t have earthquake insurance either.

Washington Insurance Commissioner Mike Kreidler said in an interview Thursday that while about 12% of homeowners have the additional insurance riders, most probably won’t file claims because their deductibles are so high. Insurance companies typically require deductibles of 10% to 20% of the home’s insured value. (In California, about 17% of homeowners have earthquake coverage.)

Additionally, Kreidler said, many homeowners have been surprised to learn that they don’t have earthquake insurance included in their homeowners’ policies.

But since most of the damage has been “relatively mild,” Kreidler believes that Wednesday’s 6.8 earthquake should serve as a strong warning to Washington residents.

“This is something people should be thinking about,” said Kreidler, who has only been on the job for seven weeks.

Those who have earthquake insurance--and many others who are unsure if they do--flooded insurance company hotlines Thursday. Insurance adjusters also began inspecting property damage Thursday, beginning with the most serious claims, several company officials said. Additional adjusters are being flown in from other cities to help.

Total losses are now estimated at $3.6 billion. Much of that, Kreidler and others said, comes from problems with such costly infrastructure as roads, bridges and government buildings.

Both Washington Gov. Gary Locke and Kreidler suggested that the Federal Emergency Management Agency will offer low-interest and no-interest loans and grants to help residents and business owners. FEMA Director Joe Allbaugh surveyed the damage Thursday.

No amount of money, however, will replace the small, one-of-a-kind Dale Chihuly Venetian piece that shattered at the Foster/White Gallery in historic Pioneer Square. Gallery manager Bridget Young spent Thursday morning tallying damage estimates for a specific purpose: Her boss has earthquake insurance.

“I’m working on filling out the insurance report right now,” Young said. “This is definitely one of the hazards of being in this business. But the artists will be covered. Absolutely.”

Some industry experts said that, even for homeowners and others without earthquake coverage, there are ways to recoup losses.

“Secondary” losses are covered by most policies so, for example, flooding caused by a broken water main would be a legitimate claim.

And Karl Newman, executive director of the Washington Insurance Council, a nonprofit trade group, said that automobile insurance policies will cover accidents or damage sustained to vehicles.

Additionally, some insurance companies offer businesses “interruption of service” coverage to regain economic losses suffered when a company has to close.

Still, insurance officials say residents in earthquake-prone areas should not become complacent.

“Americans tend to be optimistic,” Newman said. “Our optimism, however, can be dangerous. The fear that people felt yesterday should give way to: Let’s get busy and prepare for the next one.”