Report: Uptake of Earthquake Insurance in Missouri Drops to Historic Low

New report from Missouri insurance regulators shows earthquake coverage plummeting amid sharply escalating insurance premiums.

The new Earthquake Insurance Market Report from the Missouri Department of Commerce and Insurance (DCI) shows that earthquake coverage in the six-county New Madrid region of the state, the percentage of residences with earthquake coverage declined by 47 percentage points between 2000 and 2020, from 60.2% to 12.7%.

One of the culprits of this continuing fall is the sharply escalating cost of earthquake insurance in the region. In just the last 10 years, costs have increased by 102 percent in the New Madrid counties. Since 2000, costs have increased by 760%.

“There is an increasing gap between the insured and uninsured in the highest risk region surrounding the New Madrid fault. The cost of earthquake coverage in that area is prohibitively expensive and some insurers have pulled out altogether. This is a multi-state issue and will require multi-state collaboration to address it,” Chlora Lindley-Myers, director of the Missouri Department of Commerce and Insurance, said in a media release.

Based on a survey of Missouri insurers, nearly 20% of the earthquake market in New Madrid does not offer coverage with a deductible less than 25% of the value of the insured property.

DCI has been actively working to bring awareness to the issue through education campaigns focused on consumers in the New Madrid fault area. The department, in partnership with other state and federal agencies and members of the insurance industry, is hosting an inaugural event to study and explore this issue and to bring innovative minds together to address this ongoing problem. The Missouri DCI will host the first Central U.S. Quake Strategy Summit in September.

Source: Missouri DCI

Topics Catastrophe Natural Disasters Missouri