Earthquake

Earthquakes cannot be predicted with any degree of precision and are most frequent in the West. While a few deadly ones have been recorded in the eastern and central parts of the country, there have been no major ones there since the 1800s. It is widely considered a matter of time before another major quake hits the seismically active West, home to considerable volcanic activity and geologic fault lines. The country's most severe quake in modern times had a magnitude of 9.2 in Alaska in 1964. One believed to be almost as large hit the Pacific Northwest coast in 1700, permanently changing the coastline.

Earthquake insurance costs vary widely by region and amount of the deductible. Aside from quake-prone California, the Insurance Information Institute lists Seattle, Portland, Ore., New York City and Salt Lake City as among cities with high loss potential. The costliest loss from earthquake was the 1994 Northridge quake in California, which caused an estimated $20 billion in damage, $12.5 billion of it insured.

On last Friday Allstate Insurance announced it would drop covering earthquake insurance to most of its 407,000 quake customers nationwide as a part of a larger move to reduce exposure to catastrophic losses. The company has not written new earthquake insurance since March 6 and announced Friday that existing earthquake policies will not be renewed. According to the company four states (Kentucky, Connecticut, Rhode Island and Florida) require it by law to offer earthquake coverage, but the company is in various stages of talks with regulators there.
The company has also declined storm renewals in some parts of Florida and New York and has taken a hard look at coastal coverage from Texas to Florida beginning with Hurricane Andrew in 1995.

No other major companies have yet expressed any plan to take similar action. In California, the most earthquake-prone state, the coverage is not affected by the Allstate decision. It is covered by the California Earthquake Authority, which has about 750,000 policies in force covering about 13.5% of the state's homeowners. The authority, founded by the Legislature in 1996, has approved a 22% rate cut effective July 1 last year to encourage more people to buy coverage.

For keeping track of recent earthquake activities, you may regularly visit the eathquake page of U.S. Geological Survey.