Number of Missouri Homes with Earthquake Coverage Declines

February 18, 2019

Between 2008 and 2017 rhere was a significant drop in the number of homes in Missouri insured for damage from earthquake, state insurance regulators report. That’s despite the fact that earthquakes present a significant hazard in Missouri, according to a Residential Earthquake Coverage Report released by the Missouri Department of Insurance.

The department noted in a media release that occurrences of earthquakes in southeast Missouri are not rare. Missouri experiences small earthquakes regularly and there have been four earthquakes measuring a magnitude of 4.5 or greater in the New Madrid Seismic zone since 1976, the department said.

The report describes the area at highest risk in Missouri from activity in the New Madrid Seismic zone as extending from the bootheel of the state “up the Mississippi River to the entirety of the St. Louis metropolitan statistics area (MSA).”

The department said that according to the U.S. Geological Survey, there is a 25 percent to 40 percent chance that an earthquake with a 6 or higher magnitude will impact the New Madrid Zone within the next 50 years.

“Many homeowners may assume their existing policy covers them in the event of an earthquake. That is simply wrong,” Chlora Lindley-Myers, director of the Missouri Department of Insurance, said in the release. “Coverage for earthquakes must be purchased separately, usually through an earthquake endorsement that is added to your insurance policy.”

Between 2008 and 2017 in the six-county New Madrid region of the state, the number of residences with earthquake coverage declined by 37 percent. Over 60 percent of the dwellings in the zone had earthquake coverage in 2000.

In 77 Missouri counties, fewer than 20 percent of residences have earthquake coverage. In only seven counties are at least half of the residences insured from damage caused by earthquakes.

The report also shows that the cost of earthquake coverage has increased significantly, particularly in the high-risk New Madrid area. In just the last 10 years, costs have increased by 132 percent in New Madrid counties. Since 2000, costs have increased by 611 percent.

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Insurance Journal West February 18, 2019
February 18, 2019
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