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Standard insurance policies don't cover damages like those created by Tuesday's earthquake
David Whitlock (right) and Doug Whitlock of Mineral Auto Parts inspect building for damage after the earthquake.
DAVE ELLIS/THE FREE LANCE-STAR
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Date published: 8/25/2011
Mac Flick had the same answer for all four clients who called yesterday morning to see if their insurance policies covered earthquake damage to their property.
"I said, 'I'm sorry, but no,'" said Flick, who runs Lake Anna Insurance in Mineral Town Square shopping center with his son and daughter-in-law. "Most of the people said, 'I figured that.' Others said, 'I can't believe they won't cover this.'"
Flick was sympathetic. His home, which is in a Spotsylvania County subdivision near the Louisa County line, suffered between $10,000 and $15,000 worth of damage due to the quake--and his insurance policy doesn't cover it, either.
According to the Insurance Information Institute, standard insurance policies for both homes and businesses exclude damage from earth movement, although they normally cover fire and water damage due to gas and water pipes that burst due to an earthquake.
Cars, trucks and other vehicles are covered for quake damage by the comprehensive portion of vehicle insurance, which is optional. It also provides protection against flood and hurricane damage as well as theft.
While many insurance companies offer a rider to existing homeowners' or business owners' insurance policies to cover earth movement, including sinkholes, few people get one because earthquakes aren't a common occurrence, especially on the East Coast.
Riders also typically include a deductible, which generally takes the form of a percentage. This can range anywhere from 2 percent to 20 percent of the replacement value of the structure.
"If the deductible is 10 percent, that means the deductible on a $100,000 house is $10,000," said Becky Mathes, an agent at Maloney & Ward Insurance and Investment Services, 202 West Evans St. in Culpeper. "That discourages some people. Two percent wouldn't be so bad, but who has $10,000 or more just sitting around?"
Still, Mathes said she's already got a list with the names of nine people who want to get earth-movement riders on their policies.
Flick, on the other hand, is willing to take his chances. "I'm a betting man," he said. "It was a 100-year quake. I won't be around for the next one."
Tuesday's magnitude-5.8 quake, whose epicenter was closest to the Louisa County community of Cuckoo, was the second-largest in Virginia's history. It was surpassed only by a magnitude-5.9 quake in May 1897 in Giles County.