Posted on May 19, 2014

Do Missouri Businesses Need Earthquake Insurance?

Earthquake insurance missouri

The state of Missouri is situated on one of the most active seismic areas in the United States. As a matter of fact when looking at earthquake insurance, Missouri ranks third just after California and Washington. While most citizens aren't aware of earthquake risk in the state, it actually sits on the New Madrid fault zone, which is comprised of three major faults. Historically, Missouri has seen its share of shaking with the largest measured quakes occurring in 1811 and 1812 at a magnitude of 7.7 to 8.1 on the Richter scale.

Scientists and government officials know that it is just a matter of time before a major quake hits the state, and even in the last few years, Missouri has experienced numerous quakes in a range of 4.0 and lower. Some go undetected while others can even be felt in surrounding states as well.

Because of the risk associated with potential quake damage, Missouri businesses need to purchase earthquake insurance to fully protect their assets. Many properties are not constructed using earthquake resistant materials or design, especially those built prior to the 1980s. Should a significant quake hit the state and cause extensive damage, many residents and business owners are without proper protection.

Residential and commercial property insurance does not provide coverage for earthquakes. Policy holders must purchase either a separate policy or add quakes as an endorsement to existing policies. Earthquake insurance has deductibles similar to other commercial insurance policies except that rather than a set dollar amount such as $1,000 or $2,000, the earthquake deductibles are based on a percentage of property value. For example, if an office complex is insured for $150,000 with a 5 percent deductible, the business owner would be responsible to pay the first $7,500 in damage in the event of a quake.

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