May 17, 2011
Missouri Department of Insurance: Homeowners policies do not cover earthquake damage
Reminder issued during national earthquake response exercise
Jefferson City, Mo. - Government and private-sector officials across the country this week are testing their preparedness for a major earthquake, and Missouri's top insurance regulator suggests consumers do the same. Insurance Director John M. Huff says consumers need to buy extra insurance to be covered for earthquake damage. Huff says standard homeowners and renters insurance policies specifically exclude earthquake coverage.
"Missouri consumers should talk to their insurance agent to determine whether they need to buy earthquake insurance," said Huff. "That decision should be based on where they live, their financial situation, the value of their home and belongings, just to name a few factors."
Huff says consumers who need earthquake coverage have to buy an endorsement, also known as a rider, which costs extra. In 2010, the department reported that earthquake insurance costs about $10 per month on a $200,000 home in most parts of the state. In St. Louis and southeast Missouri - areas most likely to be affected by an earthquake - the insurance averages about $40 per month.
"The products offered by insurance companies are not meeting the needs of Missouri homeowners when it comes to earthquake protection, and it's now affecting our largest metropolitan area," said Huff. "Earthquake preparedness will be a major topic in our state in the coming months, and the scarcity of solid insurance products needs be included in that discussion."
The Department of Insurance offers an online earthquake resources page, which includes consumer tips and a chart showing the major homeowners insurers in Missouri that sell earthquake insurance to new customers. The chart breaks the state down into five regions: St. Louis, Kansas City, Springfield, mid-Missouri and southeast Missouri.
Recent data released by the department shows that the price of earthquake insurance has risen substantially in the past decade, while the percentage of homes covered has decreased.
Renters should consult an insurance agent as well. Tenants need renters insurance to cover their belongings, while landlords are responsible for insuring the building itself.
Consumers can file complaints or ask general questions about insurance by contacting the Missouri Department of Insurance at insurance.mo.gov or calling the Insurance Consumer Hotline at 800-726-7390.