April 18, 2008

JEFFERSON CITY -- Missouri citizens felt the rumbling of a magnitude 5.2 earthquake this morning that occurred near Bellmont Ill. Reports of damage and shaking poured into the U.S. Geological Survey from areas across Missouri including numerous reports in St. Louis and towns along the eastern state border. By 11:00 a.m., nearly 25,000 independent reports had been recorded.

For Missourians, the earthquake serves as a reminder that a perilous fault zone with a history of unpredictability runs along the state's southeastern border. The Missouri risk associated with a major earthquake is compounded by the epidemic lack of earthquake insurance for the state's citizens.

Between 1998 and 2006, the number of residential policies with earthquake coverage dropped nearly seven percent statewide, according to the Missouri Department of Insurance, Financial Institutions and Professional Registration. This is due largely to the fact that 43 company carriers have stopped providing earthquake insurance in the past eight years.

Insurance companies have demonstrated increasing resistance to provide earthquake coverage. Those that do offer coverage impose deductibles as high as 25 percent of the property value. Today's Illinois earthquake is likely to prompt more insurers to pull out of the market, leaving rising numbers of Missourians exposed to the hazards of the New Madrid Fault Zone.

Insurance companies know what average citizens do not: that a major seismic event in Missouri will be more economically, physically and emotionally destructive than Hurricane Katrina was to Louisiana. And Missouri does not have any resources to address the number of uncovered and under-covered homeowners in the state.

If the current situation persists, a significant earthquake in Missouri will leave citizens living in FEMA trailers paying on mortgages for homes they no longer have.

The Missouri Association of Insurance Agents has proposed legislation that would create a non-taxed state catastrophe fund to assure that insurers can assume the risk of earthquake coverage and allow them to extend coverage to all Missourians. Legislation is currently mired in the Senate and House committees.

Founded in 1899, the Missouri Association of Insurance Agents is the oldest and largest association of independent agents in Missouri, representing some 4,000 independent agents, brokers and their employees. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent insurance agents and brokers offer all lines of insurance property, casualty, life, health, employee benefit plans and retirement products. Web address: www.missouriagent.org