Insurance Information Institute Posts Earthquake Coverage Data

Insurance Information Institute (I.I.I.) reported that in some areas of the country, a combination of increasing urban development in seismically active areas and large numbers of older buildings that do not adhere to current building codes suggests the potential cost of an earthquake is likely to rise.

I.I.I. said that updated maps from the U.S. Geological Survey show that 42 states are at risk, with 16 states at high risk. Earthquake risk is especially high on the West Coast, in the intermountain west and the central and eastern United States, including New Madrid, Missouri, and Charleston, South Carolina. The new maps also show that the East Coast has the potential for larger and more damaging earthquakes than had been previously considered.

"Standard homeowners, renters and business insurance policies do not cover damage from earthquakes," says Jeanne M. Salvatore, senior vice president and chief communications officer at the I.I.I. "Coverage is only available in the form of an endorsement or as a separate policy."

According to a media release, unfortunately, a 2014 I.I.I. survey reveals that only 7 percent of homeowners nationwide report having earthquake coverage, down from 10 percent last year.

In the West, 10 percent have earthquake coverage, down from 22 percent in 2013. Seven percent have coverage in the Midwest, and in the South the proportion of homeowners with earthquake coverage stood firm at 6 percent. Only 2 percent of homeowners in the Northeast had coverage.

Even in California-where nine of the most costly earthquakes in the last century occurred-only 12 percent of residents purchased coverage. This is down from 30 percent in 1996, two years after the 1994 Northridge, California, earthquake-the most costly in U.S. history. It caused an estimated $44 billion in total property damage, including $15.3 billion in insured losses, $24.1 billion in 2013 dollars. The Northridge earthquake is the fifth most costly insured U.S. disaster.

The Insurance Information Institute (I.I.I.) is a nonprofit, communications organization supported by the insurance industry.

More information and complete details:

www.iii.org

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