If an Earthquake hit Saint Louis MO, would you be fully covered?

Get the facts on earthquake insurance in Saint Louis MO

“According to the U.S. Geological Survey, there is a high probability that one or more damaging earthquakes of magnitude 6.7 or larger will strike…”

As a St. Louis MO homeowner, what you don't know can hurt you. For example, your basic homeowner’s insurance policy doesn't cover earthquake damage, and if you do have coverage, your earthquake deductible is probably higher than you think or have planned for.

According to Tyler deLeon at Farmers Insurance in St. Louis MO, the most important thing that homeowners and prospective home buyers fail to understand is the fact that a basic homeowner’s policy does not cover earthquake damage.  He’s found that for many people, adding on earthquake coverage could be a good bet, regardless of whether your home is in the city of St. Louis, a subdivision of Fenton MO, Clayton MO or Webster Groves.

In a recent conversation, Tyler shared with us the fact that for many Saint Louis MO homeowners, the issue should not be whether to purchase earthquake insurance, but rather, how much to get.

Ultimately, the decision requires a risk assessment and personal decision that can be best made with an experienced insurance professional such as Tyler.

How likely is an earthquake in Saint Louis and how much damage would it inflict on you and your property, and how much can you afford to lose?

Earthquakes have occurred in 39 states since 1900, and about 90% of Americans live in areas considered seismically active. Yet only a small percentage of people purchase earthquake insurance. In Missouri, where earthquakes have potential exposure, less than 10% of homeowners have earthquake coverage. Saint Louis MO residents tend to look at an earthquake as something that residents of California, Alaska or Washington have to worry about.

According to the U.S. Geological Survey, there is a high probability that one or more damaging earthquakes of magnitude 6.7 or larger will strike the New Madrid fault region.

(A magnitude 6.7 earthquake is equivalent to the 1994 Northridge earthquake that killed 57 people and caused $20 billion in damage.)

The Saint Louis Business Journal covered the issue of homeowners and considerations for earthquake coverage in an article as well.

So, what does earthquake insurance cover for a Saint Louis MO real estate owner?

Ideally, your earthquake insurance policy covers the cost to replace or repair your damaged property. There are several options to consider when picking a plan:

• Does the policy cover only the dwelling, or are accessory structures, such as garages, also included?

• Will the policy pay for the contents of your home and for additional living expenses if your home is badly damaged or destroyed?

• Are there any exclusions or limitations to coverage?

• What deductibles must you pay before the insurance kicks in?

How much does earthquake insurance cost?

Earthquake insurance rates are determined differently by each insurance company and can vary widely depending on several rating factors.

Generally, older homes (including full masonry such as this 2.5 story home in the city of St. Louis) cost more to insure than new homes.

Wood framed structures have lower premiums when compared to masonry or brick structures as these homes withstand quake stresses and movements with less damage. Regions and geographical areas are also rated on a graduated scale that ranges from 1 to 5 based on the relative likelihood of quakes in that specific area.

Because earthquake insurance is a type of catastrophic coverage, most policies carry a high deductible -- anywhere between 5% and 20% of the value of your house.

How much earthquake insurance coverage should I buy?

If you decide to purchase earthquake insurance, remember that you should buy enough to cover the cost of totally rebuilding your house and replacing broken possessions. The amount of insurance you buy should be based on replacement and reconstruction costs, not the fair-market value of your property and possessions.  We highly recommend that you seek the counsel of an experienced insurance consultant and professional such as Tyler deLeon.

You also should find out your rights for filing claims before you sign on the dotted line for earthquake coverage. It's especially important to know how much time you have to file a claim after a quake, because earthquake damage may not be apparent for some time.