By Jordan Lair, Licensed Insurance Agent at MBG Insurance
Earthquakes may not be the first risk Missouri homeowners think about, but our state has a well-documented history of seismic activity. Missouri is home to the New Madrid Seismic Zone, one of the most active earthquake zones east of the Rocky Mountains.
The Missouri Department of Natural Resources reports that approximately 200 small earthquakes are detected in the New Madrid Seismic Zone each year. Scientists also estimate there is roughly a 10% chance of a magnitude 7.0 to 8.0 earthquake occurring in the zone during a 50-year period.
Although most of these earthquakes are too small to cause damage, a major event could affect homes and communities across Missouri and surrounding states. That makes it important to understand what your homeowners insurance does—and does not—cover.
Does Homeowners Insurance Cover Earthquake Damage?
In most cases, a standard homeowners insurance policy does not cover damage caused by an earthquake or other earth movement.
Without earthquake coverage, your homeowners policy may not pay for damage such as:
- Cracked foundations
- Damaged walls, ceilings or chimneys
- Structural shifting or collapse
- Damage to detached garages or other structures
- Personal belongings damaged by an earthquake
- Temporary living expenses while earthquake damage is repaired
Coverage may apply to certain resulting losses, such as a fire caused by an earthquake, depending on the policy. However, direct damage caused by ground movement is generally excluded unless earthquake coverage has been specifically added or purchased separately.
How Can Missouri Homeowners Buy Earthquake Insurance?
Earthquake insurance is generally available in one of two ways.
Add an Earthquake Endorsement to Your Homeowners Policy
Many of the insurance companies represented by MBG Insurance allow earthquake coverage to be added to a homeowners policy through an endorsement.
The price and coverage options depend on the insurance carrier, the home’s location, its construction and other property characteristics. Earthquake endorsements also typically have a separate deductible from the homeowners policy’s standard deductible.
Not every insurance company offers this option. For example, Travelers does not currently offer an earthquake endorsement on the homeowners policies we place. If your homeowners carrier does not offer earthquake coverage, that does not necessarily mean you have to move your entire home policy to another company.
A stand-alone earthquake policy may provide another option.
Purchase a Stand-Alone Earthquake Policy Through Palomar
MBG Insurance also has access to Palomar, a specialty insurance carrier offering stand-alone residential earthquake insurance.
Because Palomar’s coverage is written separately, homeowners may be able to keep their existing homeowners insurance while adding a separate policy specifically for earthquake protection. A companion homeowners or dwelling fire policy is required.
Palomar’s earthquake coverage may include protection for:
- Your dwelling
- Detached structures
- Personal property
- Additional living expenses
- Lost rental income when applicable
- Condominium loss assessments
Coverage limits and deductibles can be tailored based on the home and the property owner’s needs. Palomar’s Flex Choice program is available in Missouri and includes deductible options ranging from 2.5% to 25%, subject to eligibility and underwriting requirements.
You can learn more about Palomar’s residential earthquake insurance on the company’s website.
How Do Earthquake Insurance Deductibles Work?
Earthquake insurance deductibles are commonly calculated as a percentage rather than a flat dollar amount.
For example, if your home is insured for $400,000 and your earthquake policy has a 10% dwelling deductible, the deductible applicable to the dwelling would be $40,000.
Some earthquake policies apply separate deductibles to different coverage sections, such as the dwelling, other structures and personal property. Because these deductibles can vary considerably, it is important to look beyond the premium and understand how much you would be responsible for after a loss.
An MBG Insurance agent can help you compare:
- Available deductible percentages
- Dwelling and personal-property limits
- Coverage for other structures
- Additional living expense coverage
- Loss-assessment coverage for condominium owners
- Policy exclusions and limitations
Do Springfield Homeowners Need Earthquake Insurance?
Springfield is not located directly within the New Madrid Seismic Zone, but earthquakes can be felt and cause damage far beyond their epicenters. Earthquake risk is not limited to southeastern Missouri.
Whether earthquake insurance makes sense for your household depends on several factors, including:
- The age and construction of your home
- The home’s foundation
- The cost of rebuilding
- Your available emergency savings
- Your mortgage requirements
- The earthquake deductible you could reasonably afford
- Your comfort with retaining the risk yourself
Earthquake coverage is optional for many homeowners, but the financial consequences of an uncovered structural loss can be substantial. The right decision begins with knowing what your present policy excludes and what protection is available.
What Does Earthquake Insurance Cost in Missouri?
The cost of earthquake insurance varies from one property to another. Rating factors may include:
- The home’s location
- Replacement cost
- Age
- Number of stories
- Construction type
- Foundation type
- Selected coverage limits
- Selected deductible
The best way to determine the cost is to request a quote for your specific property. MBG Insurance can review both earthquake endorsements offered by our homeowners carriers and stand-alone coverage through Palomar.
Review Your Earthquake Coverage Before You Need It
Do not assume earthquake protection is automatically included with your homeowners insurance. Ask your agent to confirm whether your current policy excludes earth movement and whether an endorsement or stand-alone policy is available.
As an independent insurance agency, MBG Insurance can compare coverage through multiple insurance companies. If your current carrier offers an earthquake endorsement, we can help you evaluate it. If it does not—such as Travelers—we can also explore stand-alone earthquake insurance through Palomar.
Visit our personal insurance page to learn more or request a quote. Our team serves families throughout Missouri, Arkansas, Kansas, Oklahoma and Texas from our offices in Springfield, Oak Grove and Bentonville.
Coverage availability, eligibility, deductibles and policy terms vary by carrier and state. This article is for general educational purposes and does not alter or replace the terms of any insurance policy.