When you think of earthquakes, and earthquake insurance, most people don’t immediately think of the St. Louis area. The last earthquake to hit the St. Louis area was a 2.6 magnitude on September 5, 2015, and occurred along the New Madrid Fault Line, which runs through southeastern Missouri.
Generally, you can still endorse earthquake insurance onto most property policies, but it is getting harder and harder to do so. Some companies have canceled all earthquake insurance on new and renewal policies. Some are allowing customers who currently have earthquake coverage to keep their earthquake coverage but these companies will not allow any new policies to obtain the coverage. Other companies are reacting by raising their earthquake deductibles and raising their rates.
Are there any restrictions on Earthquake Coverage due to the age of dwelling?
As far as personal lines, homeowners and? most companies are trying to avoid all truly solid brick buildings. Because of St. Louis was in close proximity to a lot of brick-making companies, St. Louis has more than the normal amount of solid brick homes built well into the 1950s. Most companies are comfortable with frame and brick veneer buildings built after 1950.
Is there any way that you can buy earthquake on its own?
Technically yes. You can buy a stand-alone earthquake policies by using excess surplus lines companies. In order to understand this method, you have to know the difference between “admitted” and “non-admitted” companies.
Admitted companies are insurance companies that are admitted under an individual state’s insurance laws.
- An admitted insurance company must conform to the rules and regulations of the particular state’s Department of Insurance.
- Admitted carriers also must submit their rates to the state for approval.
- The benefit of working with an admitted company is that the state is obligated to pay an insurance company’s claim even in the event of the insolvency of the company. (We like that safety net.)
Non-admitted carriers may be perceived as riskier than admitted carriers. But this might not always be the case. Because they do not have to submit their rates to the state they have greater pricing flexibility so they can set rates high enough to cover higher risk events.
Is it possible to buy a stand-alone policy for earthquake insurance is St. Louis?
Yes, you can buy a stand alone policy for earthquake insurance in St. Louis. But it’s complicated and it’s going to be a non-admitted company.
If you have any earthquake insurance questions, we are here to help.