Filed Under:Carrier Innovations, Regulation/Legislation

New York Regulator Warns Of N.Y.C. Quake Danger

NU Online News Service, Feb.17, 2:59 p.m. EST

The New York Insurance Department has put out an advisory warning consumers that some scientists believe there is a greater earthquake risk for New York City than previously believed.

Reacting to the Haiti quake, the department announced that the city is exposed to quake danger from "a series of subtle but active faults in the region."

While New York has significantly less frequent damaging earthquakes compared to California, "it is considered a region at high risk because of the city's dense population and its concentration of buildings and infrastructure," the announcement said.

The department advised that if preparedness includes having a home or business property insured against an earthquake, the answer is that New York is probably not prepared.

Earthquake insurance, according to department figures, accounted for only $15 million of the total $3.9 billion in premiums written by property and casualty homeowners' insurers in the state in 2007. In 2008, the amount of earthquake policy premiums remained essentially the same.

The department noted that dozens of small quakes have been felt in the city, with a magnitude 2.4 earthquake, believed to have been caused by a fault under 125th Street, occurring in 2001.

Magnitude 5 earthquakes occur in New York about every century, the department said, and mentioned that in 1884 an earthquake centered off Rockaway toppled chimneys and its shock was felt from Virginia to Maine. New Yorkers have also felt shocks from earthquakes centered as far away as Canada, it reported.

New York City, the department noted, is ranked among the top-40 high-loss potential urban areas in the country by the Federal Emergency Management Agency.

The New York City Area Consortium for Earthquake Loss Mitigation, a group of public and private stakeholders including scientific and emergency management organizations, said in 2003 that even a moderate earthquake here could cause deaths and significantly impact the economy, the department said.

Unlike California, where residential property insurers must offer their customers the opportunity to buy earthquake coverage, the department explained that property insurers in New York are not required to offer it.

Insurance Superintendent James Wrynn said, "People need to make informed decisions about buying any kind of insurance. They need to understand potential risks and their potential for financial loss should a disaster occur and then decide how best to protect themselves."

Earthquake insurance provides financial protection against the cost of damage to a structure caused when there is a sudden and rapid shaking of the earth's surface. Policies carry a deductible, usually in the form of a percentage of the structure's replacement value, his statement said.

The Insurance Information Institute, it was noted, estimates earthquake insurance for a brick home would likely cost between 60- and 90 cents per $1,000 of coverage in New York, compared to the Pacific Northwest, where it would cost $3-to-$15 per $1,000 for a similar home.

While homes are not covered by standard insurance, cars and other vehicles are covered for damage caused by earthquakes under the optional comprehensive coverage part of an auto insurance policy.

Consumers were advised they could obtain additional information about earthquake risks at the Web sites of the Federal Emergency Management Agency (www.fema.gov) and the U.S. Geological Survey (usgs.gov).

If they have coverage questions, the department advised them to first contact their insurance company, broker or agent. The Insurance Department's Web site (www.ins.state.ny.us) also provides information as well as the Department's Consumer Services Bureau from 9 a.m. to 4:30 p.m., Monday through Friday, at 800-342-3736.

NAPSLO 2016

 

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