(The Center Square) – If a major earthquake occurred in Missouri’s New Madrid Seismic Zone, researchers say it could be the costliest natural disaster in the nation’s history.
In preparation for a disastrous earthquake, the Missouri Department of Commerce and Insurance (DCI) is launching an education campaign in February – Earthquake Awareness Month – to help Missourians prepare for personal and financial survival. DCI research shows the percentage of those with earthquake insurance coverage in the highest risk areas of the New Madrid fault area dropped from 60.2% in 2000 to 12.7% in 2020. The 47-percentage point drop is due to the increasing cost of earthquake insurance. Insurance premiums increased 102% since 2010 and 760% since 2000 in New Madrid counties.
“The southeastern quadrant of Missouri includes the New Madrid Seismic Zone, which experiences around 200 small earthquakes per year,” DCI director Chlora Lindley-Myers said in a statement. “Yet, the most at-risk consumers don’t seem to know their homeowner’s or renter’s policies don’t cover earthquake damage. We are concerned and want consumers to know where they stand before a major earthquake occurs.”
The Mid-America Earthquake Center at the University of Illinois and the Federal Emergency Management Agency predict a major New Madrid earthquake could cause economic losses of $300 billion, which would surpass Hurricane Katrina and the 2021 winter storms as the costliest in the nation’s history. A leading catastrophic risk-modeling company estimated insured losses would be approximately $120 billion in 2011 dollars, according to a DCI media release.
Recent research by DCI, the Center for Insurance Policy and Research at the National Association of Insurance Commissioners and the University of Missouri Disaster and Community Crisis Center found 45.2% of adults surveyed in at-risk counties weren’t aware their homeowner’s insurance doesn’t cover damage from earthquakes. More than 69% of renters surveyed weren’t aware their renter’s insurance doesn’t cover earthquake damage.
Along with the consumer education campaign, DCI will bring together state and federal agencies and representatives of the insurance industry in May for the inaugural Central U.S. Quake Strategy Summit.
“The theme of the Summit is ‘Closing the Gap,’ and we’ll be inviting leading innovators and visionaries to start conversations geared toward solving this critical issue,” Lindley-Myers said. “It is imperative that we plan our resiliency and recovery strategies before a major seismic event strikes the New Madrid region.”