S.C. earthquake offers reminders about risk
Columbia, S.C. – February 18, 2015 – About one year ago, a 4.1 magnitude earthquake hit Edgefield County, South Carolina. Fortunately, the event caused no major devastation or deaths.
Minor quakes can remind us that seismic events are capable of causing massive destruction in the blink of an eye, and without warning. The devastation can be extensive and expensive, and recovery can take years.
“While we typically don’t think about them, earthquakes pose a very real threat to South Carolinians,” said Russ Dubisky, Executive Director of the South Carolina Insurance News Service. “This is certainly coverage that individuals should consider as they look for ways to protect their family, assets, and financial futures against natural disasters.”
On Aug. 31, 1886, Charleston was hit by one of the most damaging quakes ever in the eastern part of the U.S. Experts estimate that if the Charleston quake -- which measured a 7.3-magnitude on the Richter scale and damaged 90 percent of the area's brick structures -- were to occur today, damage to insured property would exceed $40 billion.
Recent catastrophe models, the process of using computer-assisted calculations to estimate the losses that could be sustained due to a catastrophic event such as a hurricane or earthquake, have placed a higher emphasis on earthquake risk in South Carolina. In fact, according to catastrophe research, all of South Carolina carries a moderate to high risk of earthquakes. Geologically, Charleston lies in one of the most seismically active areas in the eastern United States.
Earthquakes are not covered under standard U.S. homeowners or business insurance policies, but coverage can be added to most policies either as an "endorsement," or by purchasing a separate, monoline policy to cover damage to a home and its contents caused by the movement of the earth.
Increases in risk and exposure to earthquake damage have led many insurance markets to evaluate reducing their earthquake exposures. Fortunately, earthquake coverage is still available in South Carolina. According to Robert Sanders Jr., Executive Vice President of Preferred Specialty, LLC, an MGA and Excess and Surplus Lines broker based in Columbia, "The excess and surplus lines market provides insurance solutions when there is a void in providing coverage in the standard insurance market."
A recent poll by the Insurance Information Institute (I.I.I.) found that only 10% of American homeowners have earthquake insurance, compared with 13 percent in 2012.
“While the number of people buying earthquake insurance has declined, the potential cost of U.S. earthquakes has been growing because of increasing urban development in seismically active areas and the vulnerability of older buildings, which may or may not have been built or upgraded to current building codes,” said Dr. Robert Hartwig, CPCU, an economist and president of the I.I.I.
The South Carolina Insurance News Service provides the following facts about earthquakes:
► All of South Carolina is considered to have a moderate to high risk for earthquakes.
► A damaging earthquake could result in South Carolinians facing serious injury and property damage. Without earthquake insurance, individuals would have to pay for all damages to their home and possessions.
► Earthquake is priced largely depending on the location and construction of your home. The average cost of earthquake coverage varies around the state. Earthquake deductibles apply separately from your basic homeowner's (and business) policy deductible.
► Consider retrofitting your home to make it more resistant to earthquake damage, like fastening a framed house to the foundation or fastening interior shelves securely to walls.
For more information from the S.C. Insurance News Service, or to schedule an interview, call (803)252-3455.
For over 35 years, the South Carolina Insurance News Service has been providing free insurance information to consumers and the media about property and casualty insurance issues.
For more information, contact the South Carolina Insurance News Service at 803-252-3455 or use our contact form.