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With Southern California's recent experience of strong earthquakes and the ongoing impact of numerous aftershocks, Missouri officials again are focusing on the possible impact an earthquake would have in the Show Me State.

That's because some of the strongest earthquakes in North America's recorded history — at least since Europeans came to the continent — happened in 1811 and 1812, based on Southeast Missouri's New Madrid Fault as the epicenter of the three main quakes and hundreds of aftershocks.

Among its impacts, some said the Mississippi River ran backward.

Kentucky's Reelfoot Lake was created where the Mississippi used to run — and there's a portion of Kentucky attached to Missouri because of a change in the river's main channel.

Here's how Missouri's State Emergency Management Agency explains the earthquakes' impact, on its website, sema.dps.mo.gov/earthquake_preparedness: "The series of earthquakes destroyed several settlements, dramatically affected the landscape and even altered the flow of the Mississippi River. People on the East Coast of the United States felt shaking, and church bells reportedly rang as far away as South Carolina.

"The risk of a similar earthquake remains, (and) the seismic zone is still active today, averaging more than 200 small earthquakes each year with some felt by nearby residents."

Diminishing affordability of earthquake coverage

That potential threat also has officials at the state's Department of Insurance, Financial Institutions and Professional Registration concerned.

Last week, the department issued a news release and a report announcing: "New report shows the New Madrid fault area of the state on the verge of an earthquake insurance market collapse."

The 25-page report details how insurance coverage for homes in the state's earthquake-likely areas has decreased, while the cost of that coverage has ballooned.

"Missouri is the third largest market for earthquake insurance among the states, exceeded only by California and Washington (State)," the report, "Missouri Earthquake Residential Coverage 2019," says in its introductory section. "Earthquake coverage has become less available and less affordable over the last 15 to 20 years. Where the coverage is available, prices have significantly increased, and consumers are required to self-insure to a greater extent than ever before."

For example, the report says, earthquake insurance rates in the six Missouri counties closest to the New Madrid Fault, on average have "increased by nearly 700 percent between 2000-18, and in one county by nearly 1,000 percent."

In an appendix to the report, the department listed those increases as Pemiscot County, 965.7 percent; New Madrid County, 823.8 percent; Dunklin County, 808.2 percent; Mississippi County, 683.1 percent; Scott County, 656.3 percent; and Stoddard County, 519.4 percent.

And, the report noted, while there have been earthquake insurance rate increases throughout the state, the biggest change has come in the areas where the most damage likely will occur.

"The rates in the highest risk areas of the data have increased much more rapidly, widening the costs between high and low risk areas," the report says. "In 2000, average annual premium in the New Madrid area was only 64 percent higher than the lowest risk counties of Missouri. By 2018, premiums were nearly 334 percent higher."

And that has resulted in a drop in coverage for the people who may need it the most, should a major earthquake hit again, as it's expected to do.

"In 2000, over 60 percent of residences in the New Madrid area had earthquake insurance," the Insurance Department report stated. "By 2018, the rate of coverage had declined to just under 14 percent, a decrease of 46 percentage points.

"In other high risk areas outside of the New Madrid zone, take-up rates also substantially decreased, from 67.6 percent to 46.3 percent over the same period."

Earthquake insurance is a separate add-on to one's homeowner's policy, not an automatic part of it.

Brandon Koch, executive director of the Missouri Insurance Coalition, told the News Tribune last week: "It's definitely a concern when you have fewer and fewer people purchasing earthquake insurance — especially in the most susceptible of areas. But some of that may be tied more to costs than actual offerings."

He encourages property owners to talk with their insurance agents or companies to see what coverage is available.

Shrinking availability of insurance coverage

The DIFP report notes: "Based on the Missouri market share for homeowners insurance, carriers with 12.5 percent of the home insurance market either write no earthquake coverage anywhere in the state, or only renew existing earthquake policies but won't issue new coverage.

"Significantly more, or 31 percent, write somewhere in Missouri, but will not provide new coverage in the New Madrid area (though some of these (companies) still offer renewal coverage)."

In the New Madrid area, the report continues, "41 percent issue some new coverage but will not insure some types of construction, such as masonry homes. Only 26.6 percent of the market issues coverage in New Madrid on the same basis as elsewhere in the state, but even these companies may have significant additional underwriting restrictions — based on the age and location of the home and other construction characteristics."

The report says those able to obtain earthquake insurance must still "self-insure" to a significant degree.

"In the six-county New Madrid area, only one insurer (among those surveyed) offers a deductible of less than 10 percent of the insured value of the residence (while) over 27 percent of the market requires a deductible of 15 percent or higher," the DIFP report says.

Also, the Insurance Department reported, deductibles often are "stacked," so they apply separately to the building and its contents.

Koch said economics plays a role in the price changes.

"I think it's critical that insurance companies charge a premium that's commensurate with the risk," he said. "The potential exposure created by earthquakes has consistently been on the rise. Some factors include increased development in earthquake-prone areas, as well as a vulnerability that comes with certain types of construction — or older buildings that were not built to code, or have not been updated to comply with current (building) codes."

He pointed to a 2017 Federal Emergency Management Agency study "that estimated, over time, earthquake losses in the United States could average $6.14 billion per year. And that estimate only factored in repairing and replacing buildings, the contents, loss of income including business interruption, rental income and lost wages. That doesn't even factor in damages to infrastructure or other impacted areas."

Calculating possible damage

The potential for earthquake damage is calculated based on the 12-point "Mercalli" scale — although the counties sitting on the New Madrid Fault are only rated at "X."

Most Illinois and Kentucky counties along the Ohio River are estimated to be in the "IX" area, while most of the Southern Illinois and Missouri counties along the Mississippi River north of New Madrid — up to and including St. Louis City and County — are rated as an "VIII."

But Mid-Missourians shouldn't get too relaxed.

The State Emergency Management Agency graphic shows Cole, Osage, Callaway and Boone counties in Mid-Missouri as being in a Category "VII" county where, SEMA says, in the event of an earthquake, "people have difficulty standing. Considerable damage (occurs) in poorly built or badly designed buildings, adobe houses, old walls, spires and others. Damage is slight to moderate in well-built buildings. Numerous windows are broken. Weak chimneys break at roof lines. Cornices from towers and high buildings fall. Loose bricks fall from buildings. Heavy furniture is overturned and damaged. Some sand and gravel stream banks cave in."

The report continues: "Of those who have earthquake coverage and are located in areas with a risk of (seven) or higher on the Mercalli scale, the amount of risk they still retain due to deductibles exceeds $14.5 billion. When this amount is added to homes that have no earthquake coverage, the value of self-insured residential property, in moderate to high-risk zones, exceeds $110 billion."

Discussion not just idle chatter

The DIFP report cited a U.S. Geological Survey report estimating "that the probability of a magnitude 7.5 or greater earthquake in the New Madrid zone over the next 50 years is between 7-10 percent. The probability of an earthquake exceeding magnitude 6 over the same time period is 25-40 percent.

"A joint assessment by the Mid-American Earthquake Center of the University of Illinois, and the Federal Emergency Management Agency, predicted that a major New Madrid event could entail total economic losses of $300 billion, surpassing the highest total economic loss of any natural disaster in U.S. history."

The first of the three powerful, 1811-12 New Madrid quakes happened about 2 a.m. Dec. 16, 1811.

The Insurance Department report noted: "According to the (USGS), the area of strong ground motion exceeded the 1964 Alaska earthquake by a factor of two to three, and was approximately 10 times as large as the 1909 San Francisco earthquake. Because of the lack of instrumentation at the time, estimates must be based on written accounts of those who witnessed the quake or its aftermath.

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"The majority of researchers believe the three primary quakes ranged in magnitude from 7.0 to 7.5, with several aftershocks ranging from 6.0 to 6.5."

According to a chart included with the report showing "estimated insured losses were (the) event to happen today," the 7.7 magnitude (Feb. 7, 1912) New Madrid quake would have generated $120 billion damage, in 2011 money.

The only earthquake on the list that was more powerful — the 7.9-magnitude San Francisco earthquake in April 1906 — generated only $93 billion in losses.

The report doesn't offer any major solutions, but it makes a comparison with the insurance industry's response to the May 2011 Joplin tornado.

"The insurance industry responded rapidly, and within three months, over $1 billion was made available to insureds," the DIFP report found. "By June of the following year, more than $1.5 billion had been paid by insurers, who would eventually cover more than $2 billion in tornado-related losses.

"Almost all structures were covered for this type of loss, resulting in a rapid infusion of funds that made recovery possible. Such a recovery mechanism is almost entirely lacking in the area of the state most vulnerable to a New Madrid earthquake."