The Missouri Department of Commerce and Insurance (DCI) has released a new Earthquake Insurance Market Report which shows that earthquake coverage in the most at-risk areas of the state’s New Madrid Fault region has reached historic lows. In the New Madrid region, made up of six counties, the percentage of residences covered by earthquakes decreased by 49 percentage points between 2000 and 2021, from 60.2 to 11.4%.
The cost of earthquake insurance has increased by 816% since 2000 in the region. And while the price and lack of availability of insurance are likely major factors in declining coverage, another potential reason is that some consumers think they already have coverage.
A recent consumer survey conducted by the Missouri Department of Commerce and Insurance, the Center for Insurance Policy and Research of the National Association of Insurance Commissioners (NAIC), and the Disaster and Community Crisis Center at the University of Missouri showed that many homeowners in the most at-risk areas of the New Madrid earthquake zone don’t realize that their current standard home insurance policies don’t cover earthquake damage.
“Missouri’s southeast quadrant, which includes the New Madrid Seismic Zone, experiences approximately 200 small earthquakes each year,” said Chlora Lindley-Myers, director of the Missouri Department of Commerce and Insurance. “Yet many of the most at-risk consumers living in this region don’t seem to know that their homeowners or renters insurance policies don’t cover earthquake damage.”
The DCI organizes an annual earthquake insurance education and awareness campaign to provide information and knowledge to people in the region who must make decisions about coverage and plan for preparedness and recovery. in the event of a major earthquake.
“Despite our best efforts, the earthquake coverage rate in Missouri’s highest-risk areas has fallen to an all-time low, and the gap between the insured and uninsured continues to grow,” said Lindley Myers. “To combat this problem, we’re taking it a step further by bringing key people together to work on a solution.”
The DCI welcomes the first Central US Earthquake Insurance Summit in St. Louis, MO, May 23-25. For the first time, this summit will bring together the insurance industry, regulators, government officials and emergency management professionals to forge new ideas to begin “closing the gap”. Leading innovators and visionaries will start conversations to solve this critical problem for consumers living near the New Madrid earthquake zone.