The New Madrid seismic zone lies in the Mississippi Valley and passes through many states, including Missouri. It has been over a century since the last earthquake, yet insurance prices are sharply rising.
What's happening?
In 2000, earthquake insurance in New Madrid, Missouri, cost a household $57 a year. Now, the average is $569 annually, KSDK reported. The increases are outpricing many families, making them go without protection.
Insurance companies are raising rates for several reasons. Corporations are building safety nets to ensure they have enough money to settle disaster claims. Inflation is another influence, but the increases are outpacing these economic shifts as businesses change how they assess risk.
Experts are using more advanced scientific models to predict when the next earthquake will strike. Projections from the last several decades are obsolete now because of enhanced accuracy. However, professionals suggest, "They can happen right here at any time and with no warning." Human activities are paving the way for extreme weather events, boosting the likelihood of a disaster in New Madrid.
Why are the insurance costs concerning?
It seems logical for insurance companies to establish solvency to pay out residents after an earthquake hits. Every dollar going into disaster mitigation saves $13, potentially protecting billions.
However, as prices go up, insurers lose low-risk clients who can justify cutting the expense. The density of high-risk insurance holders rises, incentivizing corporations to continue inflating prices and exploiting customers.
The toxic feedback loop disproportionately affects marginalized individuals who are most vulnerable to natural disasters and other adverse impacts of increasing global temperatures. These include neighborhoods of color and low-income communities.
The people who need coverage the most may struggle to afford it. These behaviors perpetuate atmospheric inequity, further delaying positive progress.
Additionally, the projections have caused ambivalent mindsets. New Madrid citizens dealt with panic from false predictions in 1990 and now think coverage is a waste of money in 2025. Some insurance companies are shutting down because of the region's perceived extreme risk. Meanwhile, the number of households with earthquake protection is at an all-time low because they don't see disasters as a pertinent threat.
What's being done about rising premiums?
Officials suggest creating a state-sponsored "last resort" fund to subsidize the uninsured. The government may also mandate affordable earthquake coverage as part of homeowners insurance packages.
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Move somewhere else 🌎 The discourse should inspire you to plan in other ways, like connecting with your community's resources. It must also motivate you to build emergency kits and evacuation plans. Even if you forgo traditional coverage, you can learn how to prepare for disaster.
If New Madrid wants to remain an earthquake-free region, you can help its cause by spreading awareness of these issues and learning how to be a better steward of the Earth.
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