April 02, 2015

Earthquake in southeast Missouri serves as reminder New Madrid Seismic Zone is active

Missouri's 2015 earthquake survey shows more than 80 percent of residents in seismic zone lack earthquake insurance

Jefferson City, Mo. - A magnitude 3.6 earthquake that struck southeast Missouri Wednesday night illustrates the need for earthquake insurance coverage, even as the market for it continues to contract, raising concerns about affordability and accessibility. The Missouri Department of Insurance recently completed an earthquake survey of insurance carriers that provide 83 percent of the homeowners market share in Missouri.

"Our analysis indicates that more than 80 percent of Missourians in the New Madrid Seismic Zone do not have earthquake insurance coverage," said Missouri Department of Insurance Director John M. Huff. "The lack of insurance coverage could seriously jeopardize property owners' ability to recover from a more significant earthquake event." 

The survey found that six out of the top 21 carriers do not offer earthquake coverage. Twelve out of the top 21 carriers do not write earthquake coverage in the New Madrid Seismic Zone (NMSZ) which includes the counties of: Dunklin, Mississippi, New Madrid, Pemiscot, Scott, Stoddard and contiguous counties of Bollinger, Butler, Cape Girardeau, Carter, Madison, Perry and Ripley.

Of the nine insurance carriers who do offer earthquake coverage in the NMSZ, four require minimum deductibles of 20 percent, three do not insure masonry homes and three had premium increases since the department's 2014 survey. Two companies have since stopped writing coverage in the NMSZ.

The New Madrid Seismic Zone, centered in southeast Missouri, is the nation's most active earthquake zone east of the Rocky Mountains. At least three of the largest earthquakes recorded in the continental United States are believed to have occurred in that area from 1811 to 1812 ­- the largest occurred on Feb. 7, 1812.

Since 2005 rates in New Madrid County have increased by over 250 percent, 122 percent in Pemiscot County, 118 percent in Mississippi County, 177 percent in Scott County and 107 percent in Dunklin County. Between 2000 and 2014 the number of insurers offering coverage in the state has also declined by nearly 30 percent.

The department has additional information about earthquake insurance at insurance.mo.gov/consumers/home/EQTable.php. Consumers with questions about earthquake coverage are encouraged to call the Insurance Consumer Hotline at 800-726-7390.