Natural Disasters Are Rare, But So Is Mudslide Insurance
Depending on who you talk to, either no one could have predicted the massive mudslide in Oso, Wash., last month — or it was a disaster just waiting to happen. But if homeowners in the slide's path are typical of most people in this part of the country, they were not insured against this kind of event — and are unlikely to see an insurance payout.
That's because standard homeowner's insurance doesn't cover mudslides. And the insurance is not only expensive, it's also difficult to purchase.
"[Coverage] is less than 1 percent in both Oregon and Washington," says Karl Newman, president of the Seattle-based industry group Northwest Insurance Council. He recognizes that number is low for a part of the country prone to mudslides, but it's just not part of a typical homeowner policy.
"There's only one type of policy that you can get for that, and it's called a 'difference in conditions' policy," Newman explains. It's generally not available from your local insurance agent. Instead, you have to buy it from a specialty firm.
Newman likens mudslide insurance to someone buying Jimi Hendrix's old guitar and trying to insure it, or attempting to insure a parade. "You can get that type of insurance that's not something that everyone would experience. So a 'difference in conditions' policy falls in that same category," he says.
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