4 Key Takeaways from the Latest Earthquake Insurance Report

by | Dec 5, 2022 | Industry Resources, News & Commentary

In early November, the Missouri Department of Commerce and Insurance (DCI), the National Association of Insurance Commissioners (NAIC), Center for Insurance Policy and Research (CIPR), and the University of Missouri’s Disaster and Community Crisis Center released a new 55-page report, which addresses the seismic protection gap in the New Madrid Seismic Zone (NMSZ) and provides insights into homeowner and renter claims.

Here are four key takeaways from this insightful report:

Significant Earthquake Risk

While not as well-known as earthquake risks along the U.S. West Coast, the NMSZ is an area of serious earthquake hazard. Scientific estimates provide the probability of an earthquake of magnitude 6.0 or greater occurring in the next 50 years in the NMSZ to be from 25% to 40%.

Growing Earthquake Insurance Protection Gap

Despite significant earthquake risk in the NMSZ, there is a substantial and growing residential property earthquake insurance coverage protection gap. Four surveys that the Insurance Information Institute (III) conducted from 2015 to 2020 found that only an estimated 7% to 16% of homeowners in the Midwest region reported having earthquake insurance.

Consumer Knowledge

Many NMSZ residents are not aware that traditional renters and homeowners insurance coverage does not cover earthquake damage and loss. Through a focus group exercise, the NAIC found that 43.4% of homeowners were unfamiliar with this exclusion.

Agent Power

The strongest predictor of a consumer having earthquake insurance was using an insurance agent to make insurance decisions. Homeowners who used an insurance agent to make insurance decisions were 2.84 times more likely to have earthquake insurance than those who did not.

When it comes to earthquakes, especially in West Coast and NMSZ areas, it’s a matter of when, not if. Reduce the stress and financial burden of experiencing a devastating earthquake with Palomar’s comprehensive and affordable earthquake coverage.

Palomar Earthquake Benefits

  • Policy limits up to $15 million
  • Flexible and customizable coverage limits
  • Deductible options as low as 2.5%
  • Competitive rates calculated at zip code level
  • Coverage offered on an admitted basis

Contact your agent today to get the earthquake insurance you need.

Bill Bold

Bill Bold

Bill Bold is the Public Affairs Advisor at Palomar where he is responsible for policy, legal and regulatory affairs. He brings over 30 years of experience in public policy and its relationships with government entities at the international, federal, state and local levels.
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