03 Oct Earthquake Insurance – Should I Buy It?
If you were on social media on the evening of September 3rd, you probably saw a lot of “did you feel that?” posts. They were in reference to the 5.6-magnitude earthquake that rattled at least seven states including Oklahoma, Missouri, Kansas, Arkansas, Texas, Nebraska, and Iowa. Luckily there were little to no physical injuries reported, but there was a fair amount of structural damage in some areas. It was a dangerous reminder that earthquakes are not just a California problem anymore. Which brings up the question – should I have Earthquake Insurance to protect my home or business? Our answer to that is a resounding “yes”!
The St. Louis Metro Region is situated about two hours north of the New Madrid fault line which runs near Cape Girardeau. Seismologists have been predicting for more than 100 years that Eastern Missouri will experience “the big one.” Could that mean something on par with the Bay Area quake of 1988, or some of the large ones we have seen more recently in the Far East? As we always remind people in the insurance business, short of having a crystal ball, there is no way of knowing. Therefore we recommend that our customers carry an Earthquake coverage endorsement on their homeowner policies.
This coverage gives some people pause, because it is an expensive coverage to have and use. Depending on the size and construction of your home, it can cost anywhere from one hundred to several hundred dollars a year. The real kicker is that it comes with a large deductible, often times 15% or more of the replacement cost of your home. Some people think they can’t afford the coverage, but we remind them to think of the alternative. If we do have “the big one” and your home shifts off its foundation, at that point they are bringing in the bulldozers. And without coverage on your policy, it means you are left with the worst case scenario: a mortgage to pay on a home that no longer exists.
I recommend talking with a local independent agent and getting a quote for this coverage if you do not currently have it. I am always more than willing to help my customers weigh the pros and cons of this and other key coverage.