Insurance companies talk about needing earthquake insurance
By Kermit Miller
Monday, July 27, 2009 at 6:22 p.m.
Read more: Local, State, Politics, Weather
The potential for a major earthquake along the New Madrid Fault in the Missouri bootheel is well known to Missourians. However, most people don’t know that the soft foundations to Missouri's rivers could cause quake damage to reach Jefferson City.
"That damage being to the interior, non-structural walls, like drywall, or small cracks in old brick facades, possibly some damage to chimneys that are brick as well,” Mid-America Earthquake Center Lisa Cleveland said.
The Missouri department of insurance is conducting a study of earthquake insurance availability in the show-me state.
State insurance regulators still get lots of questions about whether earthquake insurance is a necessary investment or whether the products offered are of any real value.
“We wanna put an end to that confusion,” Insurance Department Spokesman Travis Ford said. " Try to get some answers from the biggest homeowners insurance companies in the state about exactly what is out there, how much it costs, what the deductibles are, what the restrictions are, and whether the average homeowner can truly afford this.”
The department has sent a letter soliciting information to the twenty largest insurance companies now offering earthquake coverage. Regulators already know that the number of covered homes in the state has dropped eight percent since 2001, while the average price has climbed nearly 30 percent during that period. In Cole County, for example, about 35 percent of the nearly 23,000 insured homes have earthquake endorsements on their policies. The average additional yearly premium for that coverage is $73.
"What does it cost in this part of the state compared to others?” Ford said. “What are the prices for various values of homes made of various construction materials? So that consumers can understand 'is this something I can afford if I need it?”
A task force created by former Gov. Matt Blunt reported last year that Missouri is the nation's third-largest market for earthquake insurance.
In 2007, homeowners and businesses in the show-me state spent about $80 million on earthquake coverage.
Only California and Washington spent more.
