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By Keith Boles – bio | email feedback

JONESBORO, AR (KAIT) -It’s been close to 200 years since there has been a major earthquake in Region 8.

On one hand it could happen tomorrow, on the other it may not happen for another 200 years.

So the question is, do you need earthquake insurance for your home..or is that a gamble you’re willing to take?

Any kind of insurance is really a gamble.

When you purchase it, you’re betting that you will need it….most of the time you *don’t* but if you *do* suffer a loss, it’s good to know that you are covered.

One big question to consider is cost. Could you afford major structure repairs to your house?

In other words you have a mortgage and then thousands more borrowed to make major repairs.

That should set the thinking wheels in motion. Another question….. Does my insurance company even offer earthquake insurance?

A huge disaster to the South of us changed a lot of companies policies…no pun intended. 

Ben Ford a Jonesboro State Farm Insurance Agent said that the massive payout’s really killed off disaster insurance for many companies including earthquake coverage.

“Many companies got out of the earthquake business after Katrina hit. After the hurricane season. Because it was such a huge financial problem for so many insurance companies that they had a hard time paying it out.”

 The companies may have to outsource coverage and make it a totally separate policy.

The area around here sits in the New Madrid Seismic Zone, a pretty good place to at least consider having earthquake insurance.

Ford, “We’d highly recommend it and I would encourage you to visit with your insurance agent to insure that you do have earthquake protection.”

Granted we haven’t had a major quake in almost 200 years but the potential is always there.

Ford, went on ..”An earthquake is a huge huge risk around here. Not just on the insurance side but how the local communities and the state governments are going to respond when and if this happens. You say it happened 200 years ago and yes it did but seismic activity is recorded quite frequently around here.”

Some may ask what’s the point?

After a big quake all we will care about is surviving.

But that stage won’t  last forever.

David Moore the local OEM Coordinator said, “We go from response to recovery. And once we get into the recovery mode then the insurance companies are going to come in on their own and start doing their thing.”

But…before you decide to purchase the insurance you need to shop around.

Ford, “Earthquake insurance is available in this area but not every insurance company offers earthquake insurance.”

Just like your homeowners policy there are a lot of factors that contribute to the cost of your earthquake policy such as the kind of home you have. How close the fire department is to your home. But the average cost Ford says could run anywhere from 70 dollars to up to around 275 dollars. That’s with State Farm.

When shopping around ask if your prospective insurer makes the earthquake policy an add-on to your present homeowners policy or does it have to be a separate policy. That can drive up costs.

Ford, “When you compare your rates with different companies. Don’t just look at the rates, look at the coverages again. Make sure your homeowner policy does carry a earthquake endorsement.”

Most insurance policies carry a 10 percent deduction.

So that means you would receive 90% back on your home to rebuild.

Like I always say, you need to shop around for the best insurance fit for you and then decide if you need it, or not.

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The agreement also lets the company, which wants to reduce exposure to the
greatest storm risks, not renew about 15 percent of its policies.

The deal resolves a dispute pending before an administrative law judge over
conditions Insurance Commissioner Kevin McCarty had placed on the company’s
previously announced withdrawal plan.

As Florida’s largest private property insurer with about 810,000 policies,
the company had said in January it would withdraw after McCarty rejected a 47.1
percent rate increase. Company officials had said they needed such a large
increase to remain financially viable due to Florida’s hurricane risk.

McCarty said the company, a subsidiary of Bloomington, Ill.-based State Farm
Insurance, has since submitted new information to justify the smaller
increase.

“In no way are we giving them 15 percent as a compromise,” McCarty said at a
news conference. “I can say absolutely, categorically and without hesitation it
has not been a policy change.”

McCarty said the rate increase is part of a national trend, particularly in
coastal states including North Carolina, Mississippi, Louisiana and Texas where
the hurricane threat is greatest.

Florida, though, is at greater risk than any other state with 2,276 miles of
tidal coastlines including bays, inlets and 1,197 miles of beaches on the
Atlantic Ocean and Gulf of Mexico.

“What’s going on in Florida is a microcosm of what’s going on in the rest of
the United States,” McCarty said. “It’s a national problem that’s going to
require a national solution.”

Gov. Charlie Crist, who famously said “good riddance” to State Farm 10 months
ago, praised McCarty for “great work” after a bill-signing ceremony in
Tampa.

Many politicians from vulnerable states have been pushing for a national
version of Florida’s Hurricane Catastrophe Fund. It offers backup coverage for
insurers that otherwise may get it only at higher cost from entities based
outside the United States.

State Farm Florida President Jim Thompson said the agreement will help the
company stabilize its financial condition.

“Property policies designated for non-renewal will receive at least six
months advance notice,” Thompson said in a statement. “New rates will go into
effect as policies are renewed.”

The company will be allowed to drop 125,000 policies. The agreement also
requires State Farm agents to sell policies with other companies to customers
let go by State Farm.

They also can seek new coverage on their own or sign up with state-backed
Citizens Property Insurance Corp., Florida’s largest property insurer with about
1 million customers. Officials seeking to reduce the state’s exposure, though,
have been trying to downsize Citizens, originally intended as an insurer of last
resort.

McCarty said it’s unlikely Citizens will get all the customers State Farm is
letting go but likely will get some who don’t go with another private
company.

The deal may be good for State Farm, but state Rep. Bill Proctor, R-St.
Augustine, said “We still have a real property insurance problem. It’s not going
to go away.’

At the urging of small insurers, Crist in June vetoed a bill supported by
State Farm that would have deregulated rates for some policies offered by big
insurers. The “Consumer Choice” bill would have given customers willing to pay
higher rates a chance to get coverage from well-capitalized companies that
otherwise might not insure them.

Proctor, the sponsor, said the bill has been reintroduced with changes
designed to prevent harm to smaller companies.