Tips for getting catastrophe insurance

The 10 most expensive natural disasters in U.S. history all have occurred in the last decade. These catastrophes have resulted in insurance companies having to cover losses averaging $10 billion each year since 1989, compared with just $2 billion yearly from 1980 to 1988.

With the potential catastrophe payouts insurers face far exceeding their reserves, it's no surprise that major companies, including Allstate and State Farm, are raising catastrophe-policy premiums and deductibles.

"The insurance industry is saying to the homeowner, If you choose to live here, that's great, but you have to take on more of the risk," says Jayna Neagle, of the Washington, D.C.-based Insurance Information Institute. "It's all about sharing the risk."

If you live where tornadoes, floods, hurricanes, and earthquakes are a regular occurrence, catastrophe insurance is an important consideration. Ask these questions to avoid paying too much or choosing a company that a disaster could drive out of business:

Do you have proper coverage?

Amazingly, most people don't. For instance, only 20 percent of homeowners in floodplain areas carry flood insurance, even though their flood risk is 26 times their fire risk.

Similar figures hold in many earthquake- and storm-prone areas. Find out if you need catastrophe coverage by calling your agent or state insurance board.

Obtain information on flood, storm or quake risks in your region and compare it to risks posed by the "normal" hazards your homeowner's policy covers; if catastrophe risk exceeds normal risk, buy expanded coverage. This Old House: Beef up your insurance

Is the insurer financially stable?

A huge catastrophe can shake the stability of weaker insurance companies, putting them at risk of a default that could leave policyholders uncovered. A.M. Best and Standard & Poor's now rate insurance companies to reflect their ability to withstand such catastrophes.

Check an insurer's rating with A.M. Best, S&P, or Consumer Reports magazine. Look for an A rating or better (such as AAA or A++). Avoid lower-rated companies (those with a B or lower rating).

Are the premiums and deductibles reasonable?

Double-digit increases in catastrophe premiums are common in high-risk storm and earthquake areas. These increases vary widely by company and region, so if your premium jumps up, shop around for an insurer that's not as exposed to catastrophe-related payouts. This Old House: Insure yourself against storms

Also be aware of the change to "percentage deductibles" that require homeowners to cover a percentage of the damages rather than a set figure. For example, if the deductible is 5 percent and losses are $100,000, the policyholder covers the first $5,000.

According to J. Robert Hunter, insurance director for the Consumer Foundation of America, homeowners are not always clearly notified of the change. "A lot of people have been misled," Hunter says. "The disclosure is really vague, buried in a lot of fine print." This Old House: Do you have enough insurance?

When you're ready to buy, try these shopping tips:

1. Purchase all your insurance (homeowner's, auto, life) from an insurer that offers a multiple-policy discount. Also check if your insurer gives a "loyalty" discount for staying with them for three to five or more years.

2. Go with a high deductible; this can save up to 20 percent in premiums if you have savings to do it.

3. Install smoke detectors, a burglar alarm, storm shutters, dead bolts, and a fire-sprinkler system to reduce the premium on your homeowner's policy. The same goes for using storm- or earthquake-resistant construction methods or materials.

Evergreen air museum plans lodge, water park

Plans are in motion for an 80- to 90-room resort lodge and separate indoor water park at the Evergreen Aviation & Space Museum near McMinnville.

Brian Bauer, a museum board member and president of Evergreen International Aviation, said the lodge and 50,000-square-foot water park will follow the museum's aviation theme, which already attracts 425,000 visitors annually.

A Boeing 747 jetliner mounted on the water park's roof could become a significant landmark. "Visitors will be able to slide out of a real 747 aircraft into the pool," Bauer said. "Other than that, it will be similar to other large water parks across the country."

Located just east of McMinnville on Oregon 18, the museum campus already includes twin 120,000-square-foot display facilities and a mirror-image 55,000-square-foot IMAX® Theater.

Negotiations with local land-conservation groups has cleared the way for a 30-acre land swap that would allow the site to be brought into McMinnville's urban growth boundary, while removing other Evergreen property from development. Voters still have to approve the swap in a May election.

Nestled amid Yamhill County's signature vineyards -- producers of Evergreen's own Spruce Goose label -- the museum's modified A-frame structures are airy confections of glass, concrete and stone aggregate. Bauer said the planned lodge and water park will differ in design because of functional differences, but will feature the same quality construction.

Because the museum is a destination location, the lodge will offer higher-end accommodations, Bauer said. The interior will feature a rustic lobby with a lodge-type feel. Compared to most overnight offerings in the area, rates will be higher priced, but specific rates haven't been calculated, he said.

One exception will be the nearly completed 85-room Allison Inn & Spa, being built about 15 miles to the east near Newberg and also conceived as a destination resort. The Allison, however, will cater specifically to wine-country tourists. Rooms there will start at $295 a night.

"A place to stay is one of the top requests we get from visitors," Bauer said. "The lodge will fill a niche. The museum isn't the only attraction that makes Yamhill County a destination location.

"Vineyards, wineries and local events are also a draw. The water park will add to that appeal. Local tourism in general will benefit from this expansion," Bauer said.

Even during the current economic recession, Yamhill County continues to become better known as a destination location, said McMinnville Mayor Rick Olson. The proposed lodge would provide higher-end accommodations, he said. something the city currently lacks.

"Lodges bring a different perception," Olson said. "When I think of lodges, I think of wood beams, stone fireplaces, overstuffed furniture and an exterior that esthetically fits the area.

"When you factor in visitors to Linfield College, sometimes it's very difficult to book a room in McMinnville," he said. "We don't have enough hotel rooms to support what we have to offer."