Las Vegas Sun

September 21, 2019

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After California quakes, Las Vegas homeowners wonder if they’re underinsured


Jenna Schoenefeld / The New York Times

A bedroom is shown in disarray following an earthquake in Ridgecrest, Calif., in the early-morning hours of Saturday, July 6, 2019. A 7.1-magnitude earthquake rattled Southern California on Friday night, one day after the strongest recorded quake there in 20 years struck.

Longtime Las Vegan Tom Edington spent decades thinking earthquake insurance wasn’t a necessity. That changed when two large earthquakes in California sent shockwaves through the Las Vegas Valley last week.

“I got a policy on Monday,” Edington said. “I was covered for just about everything else, but I wasn’t covered for earthquakes.”

The kicker is that Edington — along with his younger brother, Jim — owns the Western Pacific Insurance agency in Henderson.

Edington said many policyholders reached out in the days since the first earthquake was felt on Thursday wanting to know if their existing policy included earthquake damage.

Almost all, he said, don’t.

“Some people wanted to get coverage retroactively, which, of course, you can’t do,” Edington said. “From what we’ve seen, most of the insurance carriers that we do business with now have a moratorium on new earthquake policies in many parts of Southern Nevada until things settle down a bit.”

Moratoriums can last from 30 to 60 days, according to the Nevada Division of Insurance.

While no major damage has been reported in the Las Vegas area from the seismic jolts — the U.S. Geological Survey recorded a magnitude 6.4 earthquake in Southern California on Thursday and a 7.1 magnitude quake on Friday — many residents felt the activity and were unnerved.

Nevada has had 76 earthquakes of 5.5-magnitude or above since the 1850s, and “it is clear that earthquakes will continue to occur in the state,” according to the Nevada Bureau of Mines and Geology, a research arm at UNR.

“I think the important thing is that this has given a lot of people more awareness that we do live in an earthquake zone,” said David Cassetty, deputy commissioner for the state’s division of insurance. “That’s a good thing because people should be looking into whether or not (earthquake insurance) is a product they should get.”

While earthquake insurance has not been widely talked about in Southern Nevada in recent years, Cassetty said most insurance carriers have earthquake insurance products available for Las Vegas-area consumers. Earthquake insurance would likely cost the average homeowner less than $50 per month, Edington said.

But the deductible isn’t cheap, coming in at 15% of the repair cost. In California, where the average home price is $500,000, a structure replacement could be as high as $300,000, or $45,000 for the repair, according to the Los Angeles Times.

As the USGS points out, earthquakes can be spontaneous and unpredictable. While the likelihood of a big quake hitting Las Vegas doesn’t appear to be high, extra coverage could make sense for some home and business owners.

“These policies typically have pretty high deductibles,” Edington said. “It’s more of a catastrophic coverage to be sure. It’s a specific type of coverage, but it does cover a gap in most homeowner policies. You don’t want to wait until it’s too late because you just never know what might happen.”

Edington noted that even most California property owners don’t carry earthquake insurance, and he believes the percentage of policyholders with quake coverage in Nevada is very low.

If a person owned property in Ridgecrest, Calif., last week, however, earthquake insurance would have been nice to have.

“Just 100 miles away from Las Vegas, there was significant damage,” Cassetty said. “We have fault lines running through our state, so it’s good to be prepared. When you have two big earthquakes like that in a couple of days, that’s going to get people talking.”