Missouri DCI: New Madrid Fault area insurance market not ready for major quake

Add Us On GoogleAdd as a preferred source on Google

MISSOURI. (KFVS) - The Missouri Department of Commerce and Insurance (DCI) is warning Missourians in the New Madrid Fault area of the insurance market readiness to recover after a high magnitude quake.

A DCI 2019 Missouri residential coverage report insurance consumers in earthquake high risk areas are large uninsured.

In the early 1800s, the New Madrid area experienced earthquakes with magnitudes up to 7.5.

According to AIR Worldwide, a risk modeling firm, an earthquake of that magnitude would produce insured losses of at least $120 billion dollars.

Over the last 20 years, the earthquake insurance market has significantly decreased.

Insurers that still sell coverage are requiring stricter underwriting standards.

These standards make some types of homes ineligible for coverage.

Even those that can get coverage find are some times required to “self-insure.”

Deductibles can reach up to 20 percent of the home value, and “stacked” deductibles are often applied separately to the home and their personal items.

According to DCI, the price of coverage has increased, in some instances, by more than 500 percent.

“We continue to be very concerned about the state of our earthquake insurance market in Missouri,” said Chlora Lindley-Myers, Director of the Department of Commerce and Insurance. “We take our duty to educate our consumers and build awareness very seriously. We want everyone to prepare not just for an earthquake event, but for a successful recovery afterward. It is important for everyone to understand that this is not an “if”, but a “when” situation and that it will take every one of us, preparing as best we can, to ensure a strong recovery for our communities.”