Connect with us

Uncategorized

British Colombians buy earthquake insurance. Why not Washington?

Avatar

Published

on



Breadcrumb Trail Links Opinion Opinion

Opinion: While there are aid and grant programs to help uninsured people in the US, the British Columbia government has said it will not pay earthquake damage aid due to the availability of private insurance.

Author of the article:

Glenn McGillivray and Mary Kelly

date of publication:

February 16, 2021 • 5 hours ago • 4-minute reading of Lotta Shakin’s entire “Gone” in Seattle in 2001. However, Washington state residents are not interested in purchasing earthquake insurance. Image via RIC ERNST / PNG files Article content

The Pacific Northwest is a region blessed with stunning natural beauty and bane with severe risks from powerful earthquakes.

But although Canadians and Americans living in the area share roughly the same risks from a major earthquake, the 49th parallel that delineates the Canada-US border also marks another line – more than 60 percent of British Columbia homeowners buy. Earthquake insurance protected their homes and properties, while less than 14 percent of those in western Washington state would do the same.

In insurance parlance, this means that there is a “protection gap” in both British Columbia and the state of Washington, although the gap appears to be more of a gap for Americans.

As losses from natural hazards are on an upward trajectory, globally and in Canada, the protection gap has been a popular topic in the insurance industry in recent years.

Advertising

This ad hasn’t uploaded yet, but your article continues below.

Article content

This gap is defined as the portion of total losses resulting from an event such as a hurricane, flood, or earthquake that is not covered by insurance. Globally in US dollars, this gap reached $ 171 billion in 2020 for all natural disasters, with only $ 97 billion out of a total of $ 268 billion in damages.

Over the past decade, only $ 102 billion in losses of $ 535 billion were covered by earthquake insurance alone.

This is problematic because, essentially, the larger the gap, the more disaster-related costs the community bears out of pocket. According to research, when more people buy insurance, society tends to be more resilient, prompting it to recover faster after a heavy loss compared to places where fewer people buy purchase coverage.

There are many theories as to why fewer people buy earthquake insurance in earthquake-prone countries due to the greater risk.

Our team (including Stephen Bowen, head of catastrophic foresight at Aon, a global professional services company) looked at several potential impacts on the decision to purchase earthquake insurance, including socio-economic factors (such as age, education, and income), earthquake risk perceptions, and projected operations. Governmental rescue via disaster assistance programs, in addition to issues related to product cost and unattractive policy design.

Our work finds very little difference in most of these factors in the United States and Canada, so these small differences do not explain the large variation in absorption rates in British Columbia and Washington.

Advertising

This ad hasn’t uploaded yet, but your article continues below.

Article content People feel what an earthquake feels when they stand inside the earthquake simulator in Vancouver in May 2015. Image via JONATHAN HAYWARD / CANADIAN PRESS FILES

The only significant difference found between the two regions is the wider availability of government disaster assistance in Washington, British Columbia. While there are many aid and grant programs to help uninsured or uninsured people in the United States, the British Columbia government has publicly stated that it will not pay assistance for earthquake damage due to the availability of private insurance.

We believe this and issues centered around national culture are two of the main reasons why earthquake insurance acceptance rates are so low in Washington.

The Canadian constitution heralds “peace, order, and good government” in Canada, while the American Declaration of Independence affirms “life, liberty, and the pursuit of happiness.” Because Americans tend to be individualistic and less likely to trust information provided by authorities, they are more likely to underestimate potential risks.

This has led not only to low earthquake insurance acceptance rates in western Washington, but also in California, where only about 10 percent of households have adequate coverage.

Given the global increase in economic losses due to natural disasters, it is imperative to narrow the insurance protection gap. When losses are insured, people and organizations do not need to pay for losses out of their pockets. Reducing the protection gap reduces the burden on taxpayers and enhances societal resilience.

While the protection gap exists for many reasons, potential solutions have been explored around the world to reduce it. For example, mortgage lenders may require, or governments can impose, the purchase of insurance.

Advertising

This ad hasn’t uploaded yet, but your article continues below.

Article content

Changes in product design can also incentivize more homeowners to purchase earthquake insurance, from bundling all potential disasters into a basic insurance policy to changing the policy term from a typical year to multiple years and offering ‘insurance vouchers’ to high-risk but low-income households. .

There may also be a role for governments to act as insurers, provide liquidity or solvency to insurers, or provide coverage through property taxes.

Our findings go beyond the issue of earthquake risk and are relevant when considering the impact of climate change, because the phenomenon will increase in the face of extreme weather events around the world.

The increased risk will require both insurance companies and governments to take steps to ensure adequate protection against catastrophic losses.

Glenn McGillivray is Managing Director, The Institute for Disaster Loss Control, Western University of London, Ontario. Mary Kelly is Head of Insurance and Professor of Finance at Wilfred Laurier University in Waterloo, Ontario.

This article originally appeared on theconversation.com, which is an independent source for news and opinion, from the academic and research community.

Click here to report a typo.

Is there more to this story? We’d love to hear from you about this or any other stories you think we should know. Email: [email protected]

Share this article in your social network The Province Headline News

By clicking the subscribe button, you agree to receive the above newsletter from Postmedia Network Inc .. You can unsubscribe at any time by clicking the unsubscribe link at the bottom of our emails. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300 Thank you for registering!

Comments

Postmedia is committed to maintaining a lively but civic forum for discussion and encouraging all readers to share their opinions on our articles. Comments may take up to an hour to moderate before appearing on the site. We ask that you keep your comments relevant and respectful. We have enabled email notifications – you will now receive an email if you receive a response to your comment, if there is an update for the comment thread you are following or if a user is following comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.

What Are The Main Benefits Of Comparing Car Insurance Quotes Online

LOS ANGELES, CA / ACCESSWIRE / June 24, 2020, / Compare-autoinsurance.Org has launched a new blog post that presents the main benefits of comparing multiple car insurance quotes. For more info and free online quotes, please visit https://compare-autoinsurance.Org/the-advantages-of-comparing-prices-with-car-insurance-quotes-online/ The modern society has numerous technological advantages. One important advantage is the speed at which information is sent and received. With the help of the internet, the shopping habits of many persons have drastically changed. The car insurance industry hasn't remained untouched by these changes. On the internet, drivers can compare insurance prices and find out which sellers have the best offers. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time. Unlike physical insurance agencies, websites don't have a specific schedule and they are available at any time. Drivers that have busy working schedules, can compare quotes from anywhere and at any time, even at midnight. Multiple choices. Almost all insurance providers, no matter if they are well-known brands or just local insurers, have an online presence. Online quotes will allow policyholders the chance to discover multiple insurance companies and check their prices. Drivers are no longer required to get quotes from just a few known insurance companies. Also, local and regional insurers can provide lower insurance rates for the same services. Accurate insurance estimates. Online quotes can only be accurate if the customers provide accurate and real info about their car models and driving history. Lying about past driving incidents can make the price estimates to be lower, but when dealing with an insurance company lying to them is useless. Usually, insurance companies will do research about a potential customer before granting him coverage. Online quotes can be sorted easily. Although drivers are recommended to not choose a policy just based on its price, drivers can easily sort quotes by insurance price. Using brokerage websites will allow drivers to get quotes from multiple insurers, thus making the comparison faster and easier. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc. "Online quotes can easily help drivers obtain better car insurance deals. All they have to do is to complete an online form with accurate and real info, then compare prices", said Russell Rabichev, Marketing Director of Internet Marketing Company. CONTACT: Company Name: Internet Marketing CompanyPerson for contact Name: Gurgu CPhone Number: (818) 359-3898Email: [email protected]: https://compare-autoinsurance.Org/ SOURCE: Compare-autoinsurance.Org View source version on accesswire.Com:https://www.Accesswire.Com/595055/What-Are-The-Main-Benefits-Of-Comparing-Car-Insurance-Quotes-Online View photos



Picture Credit!

ExBUlletin

to request, modification Contact us at Here or [email protected]