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A new state task force is set to examinrethis trend, including the fact that only 53 percenrt of property owners in the regiohn affected by Missouri's New Madrid which includes St. Louis, currently have earthquake That's a nearly 8 percenty drop from 1998, when almost 61 percent of ownerzs heldearthquake policies. State authoritiess say it's mainly because costd for earthquake coverage are onthe rise, especiallhy in areas closest to the fault. Missouro is the third-largest U.S.
market basef on spending for earthquake insurance, according to the the , Financialk Institutions and ProfessionalRegistration (DIFP) in Jefferson The state is surpassed only by California and Washington. Missourians spent nearly $76 millionh on earthquake insurancelast year; $20.4 million of it was writtenj on commercial properties. According to DIFP, average earthquakde insurance premiums are highest in southeasternMissouriu "bootheel" counties such as New Madrid, Mississippi and In those areas, average monthly premiums for $110,000 to $140,000 worth of coverage ranged from $104 to $139 in the most recent figures available.
In countiez farther from the fault line and at lower risk ofearthquakre damage, those premiums were as low as $30 to $40. In St. Louies County, the average was $45 in 2006; in St. Charlees County, it was $38. Doug Ommen, director of the DIFP, said the 2006 premiukm costs reflect an upswing over previous mainly for clients insoutheast Missouri. "There are parts of the stater where we anticipate prices will continue togo up, and that will driv e down takeup levels," he said.
"We expecf that based on those trends, more individual s and commercial owners will drop Certainly we are seeing a concentrationj of that trend inthe Still, just how much premiume will rise is difficult to forecast because of the unpredictability of earthquaker activity, he said. Bill Behr, president of , a soutb St. Louis County-based brokerage, said the propertyy and casualty insurancemarket -- and its premiuk costs -- have been subjecy to periodic "panics" every coupler of years due to natural disasters in various parts of the "There were big panics on earthquakes exposure about 10, six and four years he said.
"In the last couple of years, it has Nevertheless, some major insurance carriers, such as and Farm Bureau, have been spookeed into dropping their earthquake coverage Behr said the main reason is the concern overmajoe losses. "After Hurricane Katrina, carriers didn'rt want to be put in a position to have to take on a huge catastrophic loss in one part of the he said. "That's a major reason companies pull out of earthquakreinsurance markets. The big carriers don't want a catastrophifc loss to affect their bottom line.
" Behr said other largd insurers, such as , and , stilll are offering earthquake policies, but rates are Ommen said the new mostly governor-appointed state task force will help educate Missourki property owners on how to improve their protection agains earthquake losses. The task force consists of state legislators, insurance compant representatives, and construction and seismic St. Louisans on the panel includd Jim Boone of the Associated General Contractorsof St. Chris Krehmayer of Beyond Housing, Randy Noland of the , Theodorew Pruess of Hazelwood-based and Bob Schreiber of the Auto Club FamilytInsurance Company.
"It will evaluate alternatives for state involvement in helpingf preserve the availability and affordability of insurance for commercial propert andhome owners," he The task force had its firstg meeting in December in St. Ommen said Missouri legislatoras heavily involved in the task forcer effortinclude Sen. Maida Coleman (D-St. Sen. Robert Mayer (R-Dexter), and Rep. Terry Swinger Swinger has said that if the state of Missouro experienced another quake the same magnitude as the majort New Madrid activity that occurred in 1811 and losses couldtotal $80 Mike Barry, a vice president with the nonprofit in New York said although several states, includin g Missouri and Illinois, are defined by the as beingb at "high risk" for earthquake damage, typical business insurancew policies do not cover earthquake A property owner must request that coverage Earthquake insurance appears as a "rider" or on a client's policy, and typicall has its own separate deductible aparyt from the client's regular "The average earthquake insurance deductible is abou 10 percent of the value of the not 10 percent of the loss, as many people Behr said.
"For example, if a buildinh is valued at the earthquake deductible will beabougt $50,000. You can opt for a higher or lower deductible, though. Some carriers may make you take 15 The policies generally cover building cracking and collapse caused by as well as fire damage resulting from an and water damage caused by piped rupturing ina tremor. "Thosse are the main perils," Behr said. Earthquake damagse to vehicles is usually covered by the comprehensiver portion of regularauto policies, according to the DIFP Web Behr said some banks do ask that earthquakr insurance be added to a client's policyt before they will approve property loans.
According to the DIFP, therse are several factors that can influence a commercialpropertg owner's earthquake insurance rates. Ratese may be cheaper for woodframew structures, which tend to flex more than brick, stone or masonryt and can better withstand Single-story buildings tend to sustainh less damage in an earthquake, so they may cost less to The same may be true of buildings that have not yet aged and settlef much. DIFP data show that had the largest share of the Missouru commercial earthquake insurance marketin 2006, with 11.2 percenty of the business, and nearly $2.3 million in writteb premiums. It was followed by , with $1.877 million, or 9.2 percent; and Insurancs Co.
of the West, with $1.3 or 6.4 percent.
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