07-18-2009, 06:41 AM
"If you doubt the potential power of Pacific Northwest eruptions just go to Google Earth and look at Crater Lake. That eruption took the whole top off of that mountain in one blast and was fairly recent in both human and geologic time scales."
I don't doubt the power, nor minimize the risk. Rates and acceptability of risk is determined by the lender and insurance companies who set those guidelines based on experience.
I am not in the northwest insurance market ... but I am willing to bet that the risks are properly quantified or disclaimed. Volcanic damage not part of the bread and butter homeowners, mud flow would fall under flood and outside of homeowners policies. Dollars to donuts impossible to get flood / mudflow coverage in those valleys.
If not the companies will fail the insureds will not be paid out if there is a major loss exceeding the companies reserves.
There is also a "re insurance market" that sets a majority of the standards as to acceptable risk as they spread the risk for insurance producers. If a company cant sell off a part of the risk, they wont take it in normal times, much less in hazardous areas.
I think the problem in zone 1 & 2 also hinges on the fact that we had so much cheap money propping up the aforementioned companies, that they allowed these areas to become overvalued in light of the risks ... making them even harder to mortgage or insure in todays climate.
I don't doubt the power, nor minimize the risk. Rates and acceptability of risk is determined by the lender and insurance companies who set those guidelines based on experience.
I am not in the northwest insurance market ... but I am willing to bet that the risks are properly quantified or disclaimed. Volcanic damage not part of the bread and butter homeowners, mud flow would fall under flood and outside of homeowners policies. Dollars to donuts impossible to get flood / mudflow coverage in those valleys.
If not the companies will fail the insureds will not be paid out if there is a major loss exceeding the companies reserves.
There is also a "re insurance market" that sets a majority of the standards as to acceptable risk as they spread the risk for insurance producers. If a company cant sell off a part of the risk, they wont take it in normal times, much less in hazardous areas.
I think the problem in zone 1 & 2 also hinges on the fact that we had so much cheap money propping up the aforementioned companies, that they allowed these areas to become overvalued in light of the risks ... making them even harder to mortgage or insure in todays climate.