The LA fires are a poignant reminder to ask the question, “are you prepared if disaster strikes your home?” Can you answer yes or no? Maybe on a scale from one to ten? Hopefully by the end of this we’ll move the needle or get moving in the right direction. For a lesson on all the ways Oregon (or most of the Pacific NW for that matter) could self-destruct, head over to the State’s “Hazards in Oregon” webpage for a description of how Extreme Heat, Earthquakes, Tsunamis, Floods, Wildfire and Winter Storms may do us in if a Volcano doesn’t get us first.  Do you need earthquake insurance?  How you protect your Portland real estate investment is one of the most critical decisions you make.

Homeowners Insurance

You probably have it. If you have a mortgage, your lender requires it and probably pays for it through your escrow account. If you haven’t looked at the policy in a few years, the question to ask now is, “does it reflect current home values and the cost to rebuild today?” If you’ve remodeled and not adjusted your policy to reflect that you may be underinsured.

 

It would seem like homeowners’ insurance should cover the home from whatever event damages it, but it doesn’t work that way. Flood insurance may be optional or mandated depending on where you live. Coverage from wildfires is clearly the conversation in California now and in the recent past. The only way to understand what you are or are not covered for is to talk to your insurance agent.

Earthquake Insurance/Endorsement

The Cascadia Subduction Zone is the fault that runs up the Oregon and Washington about 70 to 100 miles off shore. The BIG one is a 9.0 earthquake. If you’re in Portland, head over to PortlandMaps and enter your address. Scroll down to Hazards and you’ll see the predicted damage maps for a 6.8 and 9.0 earthquake at a given address. The State’s website says, “scientists are predicting that there is about a 37% chance that a megathrust earthquake of 7.1+ magnitude in this fault zone will occur in the next 50 years.”

 

If your house is damaged or destroyed by an earthquake and you do not have a specific earthquake endorsement on your policy, it is not covered. The catch is that it doesn’t come cheap or without a caveat: one example costs an additional 20% of the premium and the deductible is 20%. Meaning that if a home’s insured value is $600,000 the first $120,000 in repairs is the homeowner’s responsibility. It is an individual judgment call of the risk/reward of carrying the coverage.  Keep in mind the cost of the land under the house may be devalued but not destroyed in an earthquake.  Lot prices in the Portland real estate market are roughly 25% of the sale price of home.

 

Grab and Go- What important documents should I have?

In the best of all worlds, there is some notice that disaster is coming, and you have some time, if only a few minutes to gather important items but that’s not always the case. Perplexity AI created this list of important documents to gather (the only part of this done by AI). Some of the items:

• Passports
• Social Security Cards
• Birth Certificates
• Wills and Trust
• Insurance Policies
• Jewelry
• Digital Backups

The best option would be to have the contents in a fire rated safe. A UL Class 350-1 hour fire rating safe is designed to keep the internal temperature of the safe below 350 degrees when exposed to 1700 degrees. Paper smolders at 368 degrees and you probably read Fahrenheit 451 in high school. Bolt it down because now you’ve gathered all your important documents into one convenient location…

Nothing is ever going to be easy about a disaster but there are certain things you can take to be a step ahead.