Missourians living along the New Madrid fault line face a significant risk of earthquake, yet many are underinsured, reports the Missouri Department of Commerce and Insurance (DCI). The numbers from the DCI are alarming—only 10.4% of homes in the high-risk zones are now earthquake insured, a drop from 60.2% back in 2000. With October's Great ShakeOut Drill in focus, the DCI is pushing residents to prepare for recovery, which includes the crucial step of obtaining earthquake insurance.
As "No one ever expects a disaster, or that it will happen to them, but we know they do happen," DCI Director Angela Nelson said the availability of coverage has slightly improved since last year with around 85% of the market offering deductibles of less than 10%, although this is a small consolation given the historical decline in coverage, according to the Missouri Department of Commerce and Insurance. Despite Nelson's reminder of past calamities such as the spring tornado in St. Louis, which starkly highlighted the dire outcomes for the underinsured, obtaining insurance remains a challenge with many insurers exiting high-risk zones or increasing deductibles, often to as much as 20%-25% of the policy limit before coverage kicks in.
The cost of getting coverage has also been climbing—a trend that the DCI attributes to the soaring cost of constructing homes coupled with higher reinsurance rates, the latter a reflection of more frequent global natural disasters and enhanced risk modeling, the New Madrid Seismic Zone itself poses a significant earthquake risk, spanning from the Missouri Bootheel to the St. Louis metropolitan area, an area all too familiar with the earth's capacity for sudden, violent shifts.
Within its mandate to protect consumers, the DCI oversees the insurance sector among various utilities and licensed professionals across Missouri, keenly aware that in the face of natural disasters, insurance is more than a policy—it's a recovery plan, as Director Nelson said as per the Missouri Department of Commerce and Insurance, "When combined with the rising cost of rebuilding homes and the sheer scale of the damage, being uninsured can be devastating," urging residents to mitigate this risk and prepare for recovery in the wake of potential earth-shattering events.
