On the fault and uninsured

Over the past several months, thousands of homeowners in Missouri and Illinois got a disturbing letter in the mail. The letter was from Safeco, their insurance provider, and it read: "Thank you for insuring your home with Safeco. We appreciate your business and the trust you place in us. We are writing to inform you that Earthquake Coverage will no longer be available for your home when your policy comes up for renewal."

The letter goes on to cite the inability to predict the likelihood of a major earthquake in the area as the reason for the change. Because of this, the letter says, homes built prior to 1950 or homes with solid masonry construction will no longer be covered by Safeco Insurance for damage caused by earthquakes. Safeco sent similar letters to homeowners in Tennessee.

Safeco is the fourth-largest provider of earthquake insurance in Missouri with approximately 33,000 homes and businesses covered. In 2004, the Seattle-based company charged clients just under $3.6 million for this coverage according to the Missouri Insurance Bureau. Safeco officials believe this market is no longer a financially prudent investment.

"If you compare this to personal auto insurance, there are millions of drivers everyday all over the country, and there is a predictable number of accidents," said Safeco spokesman Eric Trott. "Because of that we can be precise about what to charge customers, but with an earthquake in the Midwest where there has not been a significant event in almost 200 years and some scientists think it is coming, we have no way to predict."

Considered change since 1997

Trott also cited the lack of a consensus in the scientific community on the hazard of New Madrid as a factor driving Safeco's decision. He said the company has been considering the change ever since Safeco bought American States Co. in 1997 and greatly increased its Midwest customer base.

One Safeco client in Jackson who prefers not to be named said the change caused her to switch insurance providers. She now has an earthquake policy that covers $74,000 less property damage and costs her an additional $150 annually.

"I just feel like it's worth it," she said. "You need insurance because sometimes what you don't think can happen happens. I think I realized that when we had a tornado in Jackson and there hadn't been one for 25 years. I thought if this can happen after all that time then maybe an earthquake could hit."

Missouri has not had a major earthquake since three to five quakes shook the Midwest along the New Madrid Fault between 1811 and 1812. Some estimate these quakes at magnitude 8.0. The quake of December 1811 famously caused the Mississippi to run backward and rang church bells in Boston.

The New Madrid Fault runs 120 miles from Charleston, Mo., and Cairo, Ill., to Marked Tree, Ark. It crosses five state lines and cuts across the Mississippi River in three places and the Ohio River in two places. But the fault's long period of quiet has not eased the worry for those who live within shaking distance of a sleeping giant.

Just less than 41 percent of Missourians have earthquake insurance. Missouri ranks third nationwide in total premium volume paid by homeowners to insure against a quake.

Coverage for earthquake damage is generally available as an endorsement (an added fee) to an existing insurance policy. Earthquake insurance usually has a high deductible which makes yearly rates lower.

For example, State Farm Insurance, Missouri's largest insurance provider, covers more than 650,000 homeowners in Missouri and offers earthquake insurance as an endorsement. The cost of the endorsement depends on a number of criteria. Single-story homes get a better rate than two-story, wood gets a better rate than brick, and new homes are favored over old. The deductible on these insurance policies is either 5 percent or 10 percent of the home's value depending on risk. Sixty percent of State Farm's Missouri customers have earthquake policies.

Statewide, Cape Girardeau County is one of the state's highest-insured counties against the threat of an earthquake. Eighty-one percent of county's homes and farms are covered. Earthquake insurance premiums here are also some of the highest in the state, averaging $101 annually.

The numbers say this caution is warranted. Cape Girardeau County has a ranking of eight out of a possible 12 on the Modified Mercalli Scale of potential earthquake intensity, the scale used by insurers to set premiums. Pemsicot and Mississippi counties rank highest in Missouri with Mercalli scores of 10. Only about half of homeowners in these poorer counties are insured against earthquakes, according to the Missouri Department of Insurance.

tgreaney@semissourian.com

335-6611, extension 245

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Researchers disagree on New Madrid quake threat

The reason insurers and homeowners are so uncertain about the likelihood of an earthquake is that scientists themselves are unsure.

New Madrid is not a typical fault. Scientists in the already uncertain field of seismology are particularly uncertain about its danger.

New Madrid is an intraplate fault. Unlike the San Andreas Fault in California and most major faults around the world, the New Madrid Fault is in the middle of a continent and not at the boundary of any of the 29 tectonic plates that make up the earth's crust.

The New Madrid is also unusual because the fault is not at ground level but instead is covered by between 100 and 200 feet of alluvium. This makes it harder for scientists to access displaced strata of earth and chart rates of slippage.

Earthquake prediction in the Midwest is a high-stakes game. The Midwestern area of the country possesses the perfect type of earth for seismic waves. The rocks in the earth's crust below the Midwest are "harder, colder, drier and less fractured" than most other seismic areas, according to a report by the Missouri Department of Natural Resources, allowing pressure waves to travel 20 times further than in California.

In addition, because of the loose, sandy soil that predominates in the Missouri Bootheel and around much of the New Madrid zone, the ground is particularly susceptible to a phenomenon called "liquefication." Liquefication occurs during severe shaking. It causes large swaths of land to undulate like a liquid which amplifies destruction to buildings.

New Madrid's unusual nature has led to some heated debates among geologists. They agree that a lot of "microseismic" earthquakes occur along the New Madrid Fault. More than 200 tiny quakes of less than a 2.0 magnitude occur every year.

The largest recent earthquake long New Madrid was a 2.8 magnitude tremor centered three miles east of Marston in Missouri's Bootheel.

All parties agree that the ground around the fault line is shifting. But just how much it's shifting and what this shift means is where the consensus ends.

Geologists from the University of Memphis grabbed headlines in June when they published a report asserting that the ground near the New Madrid Fault moves at a rate of almost 2 millimeters per year. This movement, they said, makes another huge earthquake a near certainty. They put the likelihood of an earthquake with a magnitude 6.3 or higher at more than 90 percent over the next 50 years. The University of Memphis geologists say the likelihood of a catastrophic event -- an earthquake of 8.0 magnitude -- is between 7 and 10 percent over the same time period.

Recently, however, another team of geologists from universities that include Purdue and Northwestern put forward a much different account of the fault. Their study published in the December issue of Nature Magazine says the fault is moving at a rate of less than 1 millimeter annually. This data shows the New Madrid Fault to be accumulating strain at approximately 1/30 the speed of the San Andreas Fault. This would make the likelihood of a major quake in the next 50 years extremely low.

"There is a hazard there, but it is a lot less than people are claiming," said Seth Stein of Northwestern University. "New Madrid is more comparable to Salt Lake City than it is to California. Things move much more slowly at intraplate faults."

Stein said he does not believe the 1811 quakes were of a magnitude 8.0. He thinks the geological and historical evidence show it was a 7.0 magnitude. This makes a big difference to someone trying to decide whether or not to buy earthquake insurance.

"We lecture at insurance conferences quite a bit," said Stein. "So I'll tell you that they're selling insurance because they don't expect to pay out. That's why they sell it fairly cheaply with a high deductible. People in my field agree that 7.0-magnitude quakes occur 500 years apart, so maybe in another 200 years earthquake insurance will be a good investment. But now, I'd tell the homeowner it's not a wise transaction."

But his colleague, Eric Calais of Purdue University, isn't so sure. "I'm pretty much right in the middle when it comes to the hazard New Madrid poses," said Calais. "We just have no way of knowing. We're trying to infer what's going on 30 to 50 kilometers underground. We're seeing very little activity on the surface but there could still be slippage below ground."