Living in the Pacific Northwest is a trade-off. We get the stunning mountains, the evergreen forests, and the dramatic coastline. In exchange, we live with the quiet, looming knowledge that we are in serious earthquake country.

We all have a "go-bag" (or we know we should). We've heard about the Cascadia Subduction Zone. But let's talk about the one thing that can be even more devastating than the quake itself: the financial aftershock.

There is a dangerous misconception that's widespread among homeowners and renters in Washington and Oregon. It’s the assumption that "I have homeowner's insurance, so I'm covered."

Let's be perfectly clear: Your standard homeowner's (HO-3 and HO-5) or renter's (HO-4) policy explicitly excludes damage from an earthquake.

If a 9.0M quake hits, and your foundation cracks, your chimney collapses, or your home shifts off its foundation, your standard insurance will pay you exactly $0.00 for those repairs. Additionally, if you need to rent temporary housing during reconstruction; there is only coverage for this extra expense incurred under an earthquake policy.

This single exclusion is why we need to have a serious talk about earthquake insurance.

The Shaky Ground We Live On

This isn't just hype. The Pacific Northwest has the second-highest earthquake risk in the United States, right behind California. The Cascadia Subduction Zone, a 700-mile-long fault line off our coast, is building up stress. Scientists say there is a high probability (some estimates are as high as 37-43%) of a major M8.0+ earthquake on this fault in the next 50 years.

It’s not a matter of if, but when. And when it happens, the Federal Emergency Management Agency (FEMA) projects a catastrophic event that could damage over a million homes.

Don't count on federal disaster aid to save you. FEMA's primary assistance comes in the form of low-interest loans that must be repaid. It is not a grant to rebuild your home and your life.

What Does Earthquake Insurance Actually Cover?

Earthquake insurance is a separate policy or a "rider" (endorsement) you add to your existing homeowner's or renter's policy. It’s designed to cover the very things your standard policy won't.

Coverage is typically broken into three main categories:

1. Dwelling (Your Home's Structure): This is the big one. It pays to repair or rebuild the physical structure of your house, including its foundation, walls, and roof.
2. Personal Property (Your "Stuff"): This covers your belongings inside the home—furniture, electronics, clothing, etc.—that are damaged or destroyed.
3. Loss of Use (Additional Living Expenses): If your home is uninhabitable after the quake, this coverage pays for the additional costs of living elsewhere, like hotel bills, temporary rent, and restaurant meals.

A quick note for renters: You can (and should) get earthquake insurance, too! Your policy would cover your personal property and loss of use, which could be a financial lifesaver if your apartment building is red-tagged.

The Most Misunderstood Part: The Deductible

This is where most people get confused and frustrated. Stop thinking about your $1,000 auto insurance deductible. Earthquake insurance is in a different league.

The deductible is not a flat dollar amount. It is a percentage—typically between 10% and 25%—of your home's total insured value (your "Dwelling" coverage).

Let's do the math:

• Your home is insured for: $600,000
• You choose an earthquake policy with a 15% deductible
• Your deductible is: $90,000

This means you must pay for the first $90,000 of structural repairs out of your own pocket before the insurance company pays a single dime.

Yes, that number is terrifying. But here’s the perspective: The policy isn't for fixing cracked drywall. It's "catastrophe insurance." It's there to prevent you from losing your entire $600,000 investment. It's the backstop against total financial ruin.

We recommend a deductible under 10% and some of our companies offer deductibles as low as 2.5%.  

So, Is It Worth It for Me in the PNW?

This is a deeply personal financial decision. There is no single right answer. It comes down to your personal risk tolerance and financial situation.

Ask yourself these questions:

1. Can I afford the deductible? If a $90,000 repair bill would be impossible, could you at least afford to walk away from your home and its mortgage? If the answer is "no," insurance might be your only path to recovery.
2. Can I afford to rebuild my home without it? If you have $600,000 in savings, maybe you can "self-insure." For the other 99% of us, the answer is a hard no.
3. How much equity do I have? If you just bought your home and have little equity, you might be (financially) tempted to walk away. But if you've been paying your mortgage for 20 years and have $400,000 in equity, that is your money to lose. Insurance protects that equity.
4. What is my home made of? A newer, wood-frame home that is properly bolted to its foundation will perform much better than an older (pre-1980) home, especially one made of unreinforced brick or masonry. If you live in an old brick building, your risk of catastrophic failure is significantly higher.
5. Is my work/life tied to my home location? Loss of use to pay for temporary housing after an earthquake is important for people and families. Specifically, when a family or individual can’t pack up and move to a new state. The more you are tied to your home/location, the more important loss of use coverage becomes.  

Your Next Step: Don't Guess, Get a Quote

The cost of earthquake insurance varies wildly. It depends on your home's age, location, construction type, and the deductible you choose. You can quote & bind your own coverage in under 5 minutes here: https://bequakesafe.com/?lead=davidson

As your independent insurance advisors, we’re here to help you figure out the right earthquake coverage for your unique situation. Call or text us to discuss what your best options are.

Here in the Pacific Northwest, preparedness is a way of life. We stockpile water, we make family plans, and we practice the "Drop, Cover, and Hold On" drill. Securing your finances is just as critical. An earthquake is a geological event; the aftermath is a financial one. Make sure you're prepared for both.