What You Need to Know About Earthquake Insurance in Missouri

Living in the beautiful state of Missouri comes with its fair share of natural wonders and potential risks. While most Missourians are aware of the possibility of an earthquake, not everyone knows whether they have insurance protection against the losses caused by such a disaster. In this article, we will explore the importance of earthquake insurance, its availability, and the factors to consider when obtaining coverage.

The Need for Separate Earthquake Insurance

It's crucial to understand that earthquake insurance is not included in standard homeowners' policies. Similar to flood insurance, earthquake coverage must be purchased as a separate policy. While this may seem like an additional expense, it ensures that you are protected in the event of an earthquake-related loss.

Challenges Faced by the Insurance Industry

The insurance industry faces unique challenges when pricing earthquake insurance, especially in Missouri. Serious earthquakes are rare, making it difficult to accurately determine the associated costs. As a result, insurers offer specialty policies, such as floater policies, which can include earthquake coverage. Even if you haven't specifically purchased earthquake endorsements, insurers will often honor claims resulting from a major earthquake.

Tailoring Coverage to Individual Risks

It's worth noting that not every home or business in Missouri faces the same risk from earthquakes. If the cost of coverage were built into all policies, many individuals would end up paying for insurance they don't actually need. This is why insurance companies utilize special policy endorsements, allowing them to tailor coverage to those who require it. By doing so, insurers can effectively manage their exposure to earthquake risks and protect their financial stability.

Earthquake Coverage for Different Property Types

Earthquakes can damage both permanent homes and mobile homes. Fortunately, insurance coverage for earthquakes is available for both types of properties. Some companies offer mobile homeowners a variant of the traditional homeowner's policy with earthquake coverage as an option. Other companies consider mobile homes as vehicles and automatically include earthquake coverage in their policies.

What Your Homeowners Insurance Generally Covers

In the unfortunate event of an earthquake, the damages often extend beyond the initial tremors. Gas lines rupture, boilers overturn, and fires can break out, causing further destruction. The good news is that the standard homeowner's and business owner's policies cover losses resulting from these fires, providing a layer of protection against such eventualities.

Deductibles and Coverage Limits

Unlike traditional policies with fixed deductibles, earthquake insurance typically has deductibles based on a percentage of the total insurance limit. For example, a five percent deductible means that if your home is insured for $60,000 and the total covered loss amounts to $60,000, the insurance company would pay $57,000, and you would be responsible for the remaining $3,000. If the loss is less than the deductible, you would need to cover the damages yourself.

Need Earthquake Coverage?

In conclusion, as a price-conscious and informed consumer, it is essential to be prepared for the unexpected. Earthquake insurance is a vital component of your overall property and casualty coverage, especially if you reside in an area prone to seismic activity. Although earthquakes are relatively rare, their potential impact can be significant. By obtaining earthquake insurance, tailored to your specific needs, you ensure that you and your property are protected in the event of a seismic event. To learn more about earthquake coverage and determine the best options for your circumstances, we encourage you to contact your local insurance agent today.

Remember, life is full of surprises, but with the right coverage, you can face them with confidence and peace of mind.