Earthquake insurance is worth considering

When it happens, very likely, it will be just another day in Utah, James Holtkamp says. No ominous clouds signaling rain, no chill winds. Just . . . if you listen, the dogs, warning of what will come.

A few seconds later, if it happens like it happened in Managua, Nicaragua, in 1970, Holtkamp said, that's when it will start. After the dogs.

Holtkamp, a Utah native and current Sandy resident, was in Nicaragua when a "moderate" earthquake shook the city of Managua. It happened during the night. The city was hot and still. His window was open to let in what air it would.

Then, he said, "I heard the dogs barking far away. The barking got closer and closer, like a wave, and then it passed. Then, a few seconds later, the tremors hit. The next day, they said it was a moderately large (earthquake). I thought it was huge."

For many Americans, including Utahns, it was Hurricane Katrina that sounded a warning — both about the government's response during and following an event, and about personal disaster preparedness. In Utah, the most-feared, most likely major disaster is an earthquake. And, according to insurance industry data, the majority of Utahns are unprepared.

"Since Katrina, all types of hazards and catastrophes are at the top of mind in most people, coast to coast," according to Nicole Mahrt, spokeswoman for the American Insurance Association. "Unfortunately, that doesn't always translate to action."

Earthquake insurance is an option virtually every Utah insurance agent presents to homeowner/customers. Ninety percent of Utahns live in active earthquake zones, according to the Utah Seismic Safety Commission. If a 7.5 magnitude earthquake were to happen in the metro Salt Lake area, the commission projects that 7,600 people would die. The damage to property and the economy due to job loss could be in the tens of billions of dollars.

"The problem is that the majority of the state's population lives along the Wasatch Front, which is also where the biggest earthquake exposure is," said Brad Tibbitts, director of the state insurance department's life and property/casualty division. "And, even though the fault may be along the Wasatch Front, it's possible that we'll still have lots of damage (in the event of a major earthquake) into the Salt Lake Valley where the old lake bed is — because of the type of soil we have, the ground will have a kind of Jell-O effect, and there can be considerable damage."

Currently, however, the Utah Department of Insurance estimates that 18 percent of homeowners have earthquake insurance — either as a separate policy or an endorsement (or "rider") to traditional homeowners policies.