Consumers encouraged to to consider earthquake insurance as part of emergency preparedness plan

JEFFERSON CITY, Mo. – October's Great ShakeOut drill offers a good opportunity for families to plan ahead and prepare for a major earthquake in the New Madrid Seismic Zone.

The Missouri Department of Commerce and Insurance (DCI) encourages Missourians to make financial preparations part of their emergency plan, including earthquake insurance.

Standard homeowners and renters insurance policies do not cover earthquake damage, leaving families to shoulder the massive costs of rebuilding entirely on their own. With household budgets under significant pressure from general inflation, however, the decision to carry specialized disaster coverage has become increasingly difficult.

"We see the numbers, and we understand why families are making the difficult decision to drop this coverage. When you are forced to choose between groceries or gas and an extra insurance premium, the immediate need almost always wins," DCI Director Angela Nelson said. "The difficult reality in Missouri, though, is that it is not a matter of if an earthquake will happen, but when. If the worst happens tomorrow, what is your plan to rebuild if you don't have insurance?"

Despite the highest geological risk, the number of homes with earthquake insurance in the seven-county New Madrid region has plummeted from 18.3% in 2015 to 10.4% in 2025, according to DCI's latest residential earthquake coverage report. Statewide, fewer than 20% of residences in 98 of Missouri's 115 counties have earthquake coverage.

DCI's findings show that while statewide costs trended downward, with average annual premiums decreasing by 1.5% from 2024 to 2025, families living in Missouri's primary fault-line areas continue to face higher annual premiums to protect their homes.

After inflation, average annual premiums increased 4.6% in 2025 in the New Madrid region and 5.6% in other high-risk areas, including St. Louis.

These cost increases reflect a gradual increase over time, which DCI attributes primarily to rising construction costs – the main factor in the cost of insuring structures. Premiums are also influenced by higher reinsurance costs (insurance for insurers), reflecting both the increasing global frequency of natural disasters and the use of more sophisticated risk modeling to estimate earthquake losses.

Despite rising premiums, insurers have reported offering more flexible options in recent years, with 73% of insurers in the New Madrid region now offering deductibles of 10% or less of the property's value. More manageable deductibles may provide viable, structured coverage options to meet individual family and budget needs.

"For most of us, our home is our single largest financial asset. Going without coverage entirely means risking catastrophic, total loss," Director Nelson said. "We encourage every homeowner to talk honestly with a trusted agent, shop the market, explore lower deductible tiers, and evaluate whether a tailored policy can fit into your family's budget."

If you are weighing the cost of insurance, DCI recommends a few practical considerations:

• Compare deductible options: Ask your insurer how your premium changes between a 5%, 10% or 15% deductible. A slightly higher deductible can lower your annual premium while still protecting you against a total structural loss.

• Shop around: With increased coverage availability and more competitive deductible thresholds, shopping across carriers can help you find the best rate options for your home.

• Prioritize your assets: If a full policy is out of reach, consider coverage focused primarily on structural dwelling protection rather than personal property to keep the policy affordable.

Missourians with insurance questions or concerns are encouraged to call DCI's Consumer Hotline at 800-726-7390 or visit insurance.mo.gov/consumers for more information and resources. 

DCI is charged with protecting Missouri consumers through oversight of the insurance industry, banks, credit unions, utilities and various professional licensees operating in the state. For more information about the department, please visit our website at dci.mo.gov.