Nearly 7,000 Alaskans will lose their earthquake insurance as their policies come up for renewal in the coming months.
Allstate Insurance Co. is cutting its optional earthquake coverage nationwide, and will drop this plan as policies come up for renewal, said Caitlin Gorand, spokeswoman for Allstate’s Northwest region.
“It’s part of a larger catastrophic management strategy,” Gorand said. “The insurance industry is in the business of managing risk. We’re trying to manage our exposure to mega-catastrophes.”
Alaska customers have been receiving notices since mid-June, Gorand said. The company stopped writing earthquake policies on March 6 throughout the country.
In 2005 in Alaska, Allstate had 76,000 auto policyholders and 45,000 customers carrying policies on their property – 6,800 of them carried optional earthquake coverage, Gorand said.
Allstate is working to provide its customers with an alternate carrier that is affiliated with the company, she said.
In Alaska, earthquake and volcanic activity are nearly everyday occurrences, but the state doesn’t require earthquake insurance. The state has experienced three of the world’s top 10 earthquakes. The 1964 Good Friday quake, centered in Prince William Sound, was the largest ever recorded in North America.
Allstate and State Farm Fire and Casualty Co. together hold 64 percent of the homeowners insurance policies in the state, according to the Alaska Division of Insurance. The two hold 59 percent of the earthquake policies.
Some 54 companies offered earthquake insurance in 2004, the last year statistics are available, taking in premiums totaling $12.3 million and paying out $36,000 in damage related to earthquakes, according to the division.
Two division spokespersons said they were unaware of any other insurance companies dropping earthquake coverage.
“It was not an easy decision to make,” Gorand said. “It’s something difficult for our customers, but we think it’s a responsible decision for us in the long run.”
Was this article valuable?
Here are more articles you may enjoy.