NU Online News Service, Feb. 26, 9:44 a.m.EST

Missouri homeowners seeking earthquake insurance may faceextremely large deductibles or have to leave their currenthomeowners insurance company in order to obtain it, a stateofficial reported.

John M. Huff, Missouri insurance director, said in a statementthat when it comes to earthquake protection, a departmental surveyfound there are some "significant shortcomings in coverage."

His announcement, noting that February is Earthquake Awarenessmonth, advised that his department recently collected data onearthquake coverage from the 20 largest homeowners insurancecompanies in Missouri.

The report showed several positives, including the availabilityof coverage and the relative affordability of premiums in mostparts of Missouri, he said.

Mr. Huff said his agency found the insurance will cost about $10per month on a $200,000 home. In St. Louis and southeastMissouri–areas most likely to be affected–the insurance averagesabout $40 per month.

Missouri contains the New Madrid fault seismic zone which in theearly 19^th century was the site of the largestearthquake to hit the North American continent.

Mr. Huff, however, said he is concerned about several findingsfrom the survey:

? Deductibles are typically 10-to-15 percent. That means on the$200,000 home, the consumer would have to pay a deductible of$20,000 to $30,000 before the insurance benefits kick in.

? Many insurers require multiple deductibles: one for cost ofthe structure, and another for cost of the home's contents. Thatmeans the consumer pays as much as $45,000 in deductibles beforereceiving any benefits.

? Most insurers will not offer new policies on solid masonryhouses, and many older houses are built this way.

? Some insurers in recent years have begun outsourcing to a"surplus lines" company for earthquake insurance.

Mr. Huff noted that surplus lines insurers are subject to fewerconsumer protection laws and often have no relationship with thepolicyholder and, he said, this puts consumers filing claims in theposition of dealing with an unfamiliar company at a time of direneed.

"The huge deductibles and other issues mean consumers who havefaithfully paid their premiums for years could face extraordinarydifficulty should a damaging earthquake hit their region," said Mr.Huff.

"Missouri needs homeowners insurance to be available withoutundue restrictions, so that insurers can truly come through forconsumers should such a life-changing event occur," the directorcommented.

Mr. Huff also advised that earthquake insurance policies havebecome more restrictive in recent years, and he said the departmentwill continue to watch the market for developments.

The top 20 homeowners insurance companies represented more than80 percent of the Missouri homeowners market in 2008.

Mr. Huff said a list of companies offering earthquake insuranceto new customers is available at the department's Web site, andconsumers interested in buying coverage should shop around. Thosewho already have coverage should talk to their agents to ensurethey understand what they're paying and what they're getting.