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Do Missouri Homeowners Need to Consider Earthquake Coverage?

Everyone knows the state of California is prone to earthquakes – big and small – while Missouri has suffered some devastating tornadoes. But, apparently, the Missouri Department of Insurance believes in being prepared and is pushing for homeowners to consider purchasing earthquake coverage as well, since their homeowners insurance policy doesn’t include it.

According to the MDI, only three out of every 10 homes in Missouri are covered for damage from a rumbler. In the New Madrid Seismic Zone – that number drops to two out of every 10 homes.

So, why push so hard? Well, the answer lies in the facts. While most Missouri residents are more concerned with the threat of tornadoes and other weather events, the New Madrid area has been marked as “the most active earthquake zone in the U.S. east of the Rocky Mountains” by the MDI and seismic research.

Similar to California, standard homeowners insurance policies don’t cover earthquake damage, which means a separate “endorsement” must be purchased to protect your home.

Experiencing what Insurance Director John M. Huff believes is an earthquake coverage crisis, he advises Missouri homeowners that “having earthquake coverage is the best way to ensure you and your family, as well as our state, can recover from an earthquake.” The reason for concern is because the value of uninsured residential property in the state is getting desperately close to the $100 billion.

Although the number may not seem of major significance to most Missouri residents, it’s actually a cause for worry, because it could mean the $100 billion of uninsured properties will likely soon surpass the estimated $101 billion of insured residential properties in the state. And, that has Angela Nelson, director of the Division of Market Regulation for the Missouri Department of Insurance, among others, very concerned.

Not that Missouri is headed for a high-magnitude quake, but Missouri insurance experts are of the belief that the increasing number of uninsured properties could jeopardize the state’s ability to bounce back from a major earthquake.

Still, Missourians have not been exceptionally quick to respond to the directive.

Part of the problem could be that the earthquake market has changed somewhat over the past few decades – with rising rates, increasing deductibles, and 64 insurers leaving Missouri’s earthquake market since 2000. The result has been that fewer properties are now insured, reaching a low in 2014 with only 20 percent of homes in the New Madrid earthquake zone having the coverage.

Unfortunately, some homeowners are under the assumption that the federal government will help rebuild their home if it suffers damage in a major earthquake, according to Huff. But, they would be wrong.

In fact, under FEMA’s Individual Assistance program, the maximum grant award you can get is $32,900, which is a far cry from what your home is probably worth.

Being prepared is the key to protecting your home and family – and, making sure you’ve got the best homeowners insurance is a great place to start. You can also find out about earthquake insurance. So, why not get a free homeowners insurance quote today?

Do you have additional earthquake insurance to protect your home? Feel free to share your thoughts in the comments section below.