October 16, 2019

The “Great Central U.S. Shakeout” is a timely reminder for Missourians to think about their readiness to recover

As nearly 500,000 Missourians get ready to participate in the 2019 Great Central U.S. ShakeOut on October 17 at 10:17 a.m., the Missouri Department of Commerce and Insurance encourages consumers to consider their plan for financial recovery if a major earthquake event occurs in the state.

A recent Earthquake Insurance Market Report issued by the department highlighted some concerning facts about Missouri’s readiness to recover financially following a high magnitude quake in the New Madrid fault area, which runs through the Southeast Quadrant of the state, extending from the bootheel northwards to St. Louis and beyond.  In 2000, over 60 percent of residences in the New Madrid area had earthquake insurance. By 2018, the rate of coverage had declined to just under 14 percent, a decrease of 46 percentage points.  In other high risk areas outside of the New Madrid zone, take-up rates also substantially decreased, from 67.6 percent to 46.3 percent over the same period.

The New Madrid area of Missouri experienced a series of powerful earthquakes during the winter of 1811-1812, with experts estimating the primary quakes ranging in magnitude from 7.0 to 7.5. Were an earthquake of similar magnitude to occur today along the New Madrid fault, losses would be staggering. The risk modeling firm AIR Worldwide has estimated that a New Madrid recurrence would produce insured losses of $120 billion dollars (2011 dollars). Such losses would only be rivaled by a repeat of the 1906 San Francisco earthquake, with estimated losses of $93 billion. 

A joint assessment by the Mid-American Earthquake Center of the University of Illinois and the Federal Emergency Management Agency predicted that a major New Madrid event could entail total economic losses of $300 billion, surpassing the highest total economic loss of any natural disaster in US history.

Missourians are urged to consider earthquake insurance as a means to help them recover financially in the wake of a catastrophic earthquake event in Missouri.

“We want Missourians to be ready for all types of recovery following a disaster,” says Chlora Lindley-Myers, Director of the Missouri Department of Commerce and Insurance.“Once the immediate issues of health and safety are achieved, people will be faced with the necessity of recovering financially. It’s important that consumers think about their family, their home and consider earthquake insurance as a part of their financial readiness strategy.”

The Department of Commerce and Insurance encourages Missourians to add planning for a financial recovery to the list of other drill preparations as we focus our attention on earthquake preparedness.