Oregon leaders are pushing through legislation that could ultimately create a statewide earthquake insurance and reinsurance pool similar in response to the increasing risk of a catastrophic tremblor from the Cascadia Subduction Zone.
The goal of the Oregon’s Earthquake Insurance Task Force bill is to create an insurance system similar to the California Earthquake Authority (CEA) that encourages carriers to offer quake insurance by backstopping risk at the state level, said Mike Harryman, Oregon’s State Resilience Officer.
“Recovery from a major earthquake will be even more costly since only 20% of homes in Oregon have earthquake insurance and currently there is no residential seismic retrofitting program in our state,” Harryman said in testimony last week. “One possible investment is with SB 109, [following] the model used by the California Earthquake Authority.”
The legislation would create a task force of “industry leaders, state agencies, and the public” to consider earthquake insurance options. Harryman said that the bill has three primary focuses:
- Explore requiring all insurance companies doing business in Oregon to offer earthquake insurance to residential owners, including multi-family units. “Having the option to purchase earthquake insurance would be a great mitigation effort for the state and could help reduce Oregon’s possible disaster deductible being considered by FEMA at this time when public assistance is being requested,” Harryman explained.
- Look at the CEA model for residential incentive programs, one such program is where home owner that make seismic rehabilitation investments to their homes can receive a one-time state tax credit.
- Seek other task force recommendations.
The insurance proposal follows state initiatives to mitigate the risk of quake losses from the Cascadia Subduction Zone, which scientist have said is at risk of a major subduction earthquake that could also create a significant tsunami.
“A major earthquake would seriously damage the property of thousands of homeowners in Oregon,” Harryman said. A 1999, study done by the Department of Geology and Mineral Industries estimated over 80,000 homes would be damaged or destroyed. In the 2011 Great East Japan Earthquake there were over 400,000 homes damaged or destroyed.”