SOME COMPANIES TIGHTENING QUAKE INSURANCE COVERAGE

Southeast Missouri homeowners can still obtain earthquake insurance, but it may be harder to find and the minimum deductible may be higher.

"At the present time we are not selling earthquake insurance through Farmers Insurance Group," said Leon Wiggs, a Cape Girardeau insurance agent for the group.

Farmers Insurance, State Farm Insurance and American Family Insurance are reducing their exposure to earthquake losses in eastern Missouri, said the Missouri Department of Insurance. The department said the companies, which account for more than half the homeowner insurance statewide, were tightening coverage.

"The threat of earthquakes is getting to be serious in this part of the state," Wiggs said. "If we have a quake that registers 6 to 7 points on the Richter scale, damages will run into billions of dollars.

Wiggs said companies are having to make adjustments to have enough money to pay claims in case of a quake.

Farmers Group provides 8.4 percent of earthquake insurance in the state. State Farm had 29.5 percent of the quake insurance in 1993 and American Family 15.6 percent.

In the immediate New Madrid fault area, 64 percent of homes with residential insurance carry earthquake riders, the department said.

"We're still selling quake insurance," said Jerry Welch of American Family Insurance in Cape Girardeau. "We're not raising rates and we're not doing anything new." Welch said American Family put its current earthquake insurance policy into effect in 1991.

"We re-evaluated the total exposure throughout the New Madrid earthquake area at that time," he said. "If a major quake were to hit this area now, American Family would be able to pay its bills and remain in business."

American Family won't write insurance on solid masonry homes. Neither will State Farm Insurance. "Some of the older homes in the area would not qualify," Welch said, "but most homes constructed from the 1950s will qualify."

Bo Shantz and Don Menard, State Farm agents here, said the number of new policies may be limited. State Farm can write no more than 100 percent of its 1994 level of benefits in the quake zone.

State Farm and Farmers Insurance also will increase deductibles, from 2 to 10 percent, over the next year. This, however, would result in lower insurance costs for policyholders who purchased their insurance with 2 percent deductibility.

State Farm cited six years of the worst natural disasters in company history for making changes. The company absorbed $2 billion in losses for the 1994 Northridge earthquake and $2.6 billion in 1993 from Hurricane Andrew.

Earthquake insurance is available in the area.

Jim Burke, AAA sales agent in Cape Girardeau, said he was still offering quake insurance with 2-, 5- and 10-percent deductibility.

"A lot of insurance agents can still provide homeowners with earthquake insurance," Wiggs said. "Although I can't sell it through Farmers, I have it available with another company."