14 Feb Sinkholes, Earthquakes, and Earth Movement
Was your Corvette and part of your building just sucked into the earth? It’s time to check your insurance policy and hope that you added coverage for sinkholes, earth movement, and earthquakes. Earthquake coverage is automatically excluded from the vast majority of policies and must be added through endorsement. Many people choose to ignore the risk of earth movement because of how infrequent and unpredictable earthquakes have historically been. However, not preparing for an earthquake could be a devastating decision in the long run.
About 90 percent of Americans live in areas considered to be seismically active.
In the past 100 years, earthquakes have occurred in 39 states, and about 90 percent of Americans live in areas considered to be seismically active. According to the Earthquake Education Center at Charleston Southern University, there is a 40 to 60 percent chance of a major earthquake occurring in the eastern United States in the next 20 years. The Midwest region of Arkansas, Kentucky, Missouri and Tennessee has a similar probability of a major earthquake in the next 15 years. In addition, increasing urban development in seismically active areas and the vulnerability of older buildings has increased the potential cost associated with earthquake recovery.
Nearly everyone in the United States is vulnerable to an earthquake, but certain areas carry a much higher risk. California, Oregon and Washington are the highest-risk states, but a dangerous fault also runs through parts of Illinois, Arkansas, Indiana, Kentucky, Mississippi, Missouri and Tennessee. The U.S. Geological Survey website can offer you more specific information of your state’s exposure.
If you are located in one of these states, then protecting your family or business against earthquakes should be a part of any risk tolerance conversations you have with your insurance agent. Even if you do not live in the most at-risk states, you should consider the catastrophic possibilities of an earthquake and protect yourself accordingly. Adding an earthquake to your homeowners or business owners policy is an easy and cost-effective solution. Larger businesses will have more to think about, but considering an earthquake policy is a great start.
There are many effective precautions, ranging from simple and cost-effective to comprehensive and far-reaching, and you can determine just how thoroughly to integrate various measures based on your risk factor. Beyond geography, there are other areas that could increase or decrease your a company’s exposure to the effects of an earthquake. Certain factors may limit your company’s access to resources, ability to maintain clients, access to credit, opportunity to receive governmental support and overall chance of survival. Such at-risk firms include young companies, small companies, those in highly competitive industries, independent firms and those in any type of financial trouble at the time of the disaster. However, even businesses that fall into these categories can survive and succeed after a natural disaster with the right type of preparation and planning.
Ready to find out how affordable an earthquake policy can be? Contact one of our insurance pros.