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Earthquakes in Indiana: Check Your Insurance Policy

April 18, 2008

INDIANAPOLIS – The 5.4 earthquake that was felt throughout Indiana today, creates a realization that the Hoosier state is not safe from such tremors. The Insurance Institute of Indiana reminds consumers to check with their insurance carrier about earthquake coverage. Earthquake insurance provides protection from the shaking and cracking that can destroy buildings and personal possessions.

Most standard homeowner’s policies exclude damage caused directly by an earthquake; however, some insurers offer earthquake endorsements. An endorsement is an addition to an insurance policy that alters the terms of the contract – in the case of earthquake it expands coverage for earthquake damage.

According to the U.S. Geological Survey (USGS), Indiana is near the New Madrid Seismic Zone, which is made up of reactivated faults and extends 150 miles in southeastern Missouri, northeastern Arkansas, western Tennessee, western Kentucky, and southern Illinois. The New Madrid Seismic Zone has the highest earthquake risk in the United States outside of the West Coast. The fault is active, averaging more than 200 measured events per year. Measured events are defined at as 1.0 or more on the Richter scale. The Richter scale was developed in 1935 and is used to measure the magnitude of seismic waves from an earthquake on a scale of 0-9. Events large enough to be noticeably experienced by humans range from 2.5-3.0. Magnitudes of 5.0 or greater occur about once per decade, can do significant damage, and be felt in several states.

Homeowners should contact their carriers to see if they offer earthquake coverage. Few Hoosier homeowners have purchased earthquake endorsements. Some insurance carriers do not offer earthquake coverage in Indiana.

The potential for future earthquakes that could cause significant damage around the seismic zone has generated much research devoted to understanding earthquakes. According to the U.S. Geological Survey, a damaging earthquake in the New Madrid Seismic Zone area (6.0 or greater) occurs every 80 years. Experts predict that there could be a damaging New Madrid earthquake in the near future. In order to be financially protected, ensure that your home and belongings are covered the next time the ground begins to shake.

The Insurance Institute of Indiana is a non-profit trade association representing insurance companies in the state of Indiana. Its ultimate purpose is to create and maintain a business, legislative and public awareness climate in Indiana that promotes the continued success of the insurance segment in the free enterprise system. Visit us on the web at www.insuranceinstitute.org.

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