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SUE HERERA, co-anchor:

And Jim mentioned this, but aftershocks do continue to rumble underneath the Pacific Northwest as officials add up the cost of yesterday’s earthquake. Insurance companies will be paying to fix an estimated $ 1 billion in damage, with the cost eventually trickling back to policyholders. Jane Wells has more on the financial impact.

JANE WELLS reporting:

If you think the earthquake looked like the wrath of God, analysts say it’s merely a metaphor for what’s been going on in the

WELLS: Bear Stearns hopes the Seattle quake will serve, quote, “as a wake-up call to the insurance industry that is only now coming to grips with a catastrophe of its own making, the cumulative trauma of years of poor pricing.” And while consumers might suffer the aftershocks of higher rates, investors hope this quake leads to just that.

Mr. PAUL NEWSOME (Lehman Brothers): The other thing is that after any ca–catastrophe, individuals and corporations c–remember that they can have losses, and they tend to buy more insurance as well.

WELLS: Investors sold off insurance stocks the day of the quake in what might be called something of a Wall Street aftershock.

WELLS: Today they began coming back. That’s due in part to this particular sort of disaster. Earthquake insurance requires a separate policy, and most people do not want to pay for the expensive coverage coupled with a high deductible.

Ms. STEPHANIE MacADAAM (Insurance Information Institute): And currently less than a third of homeowners in Washington actually have earthquake insurance.

WELLS: So the exposure for Washington insurers like Allstate, Safeco and State Farm may not be that great, especially considering that many of the buildings hit are newer than those that were decimated by the Northridge quake in California seven years ago.

Ms. MacADAAM: The Northridge earthquake caused $ 12.5 billion in insured losses, and early estimates are that the damage done in Seattle is going to be far less than what happened in Northridge.

WELLS: Some insurance companies are still learning the lessons from the Northridge quake. So many claims were dragged out for so many years that a new law was passed in California allowing consumers to take insurance companies to court and reopen their claims years after the last aftershocks have rumbled through.

Mr. DOUG HELLER (Foundation for Taxpayer/Consumer Rights): The public is not going to stand by and be lowballed. It may take a while, but we’ll come back, and you’re going to pay more.

WELLS: One of the companies which suffered the worst in the Northridge earthquake was Allstate, but Paul Newsome believes Allstate learned a lot from that experience. He also thinks the company was smart to keep its premiums higher than the competition’s during the price wars of the last few years. He has a strong buy on Allstate. He’s not so confident, though, Sue, about Safeca–Safeco, and State Farm, the other major Washington insurer, is not publicly traded. Back to you.

HERERA: OK. Thanks very much, Jane.

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