LETTERS: FARMERS GROUP ADDRESSES FUTURE QUAKE NEEDS

To the editor:

In response to your April 12 editorial, I am prompted to explain our company's position on earthquake coverage along the New Madrid Fault.

Within the last six years our company's earthquake exposure has multiplied 1,500 percent. This increased awareness and demand for earthquake coverage can in part be attributed to recent earthquake activity along other faults, including California and abroad, as well as Iben Browning's prediction of an earthquake along the New Madrid Fault.

Based on a recent company earthquake simulation model, an earthquake of 7.5 magnitude would cost Farmers Insurance Group over $2.1 billion in losses along the New Madrid Fault. Missouri alone would exceed $1.1 billion, using current 2 percent and 5 percent deductibles, and that doesn't include fire damage or loss of use.

Farmers Insurance Group is the third largest insurance carrier in the United States. We, as well as the insurance industry as a whole, have a responsibility to our policyholders to pay claims as they occur as well as future claims that might occur. By taking a similar stand of raising earthquake deductibles as other companies have done, we can assure our policyholders that their claims will be paid and that Farmers Insurance Group will remain financially sound. Farmers hasn't canceled policies nor terminated agencies along the New Madrid Fault to reduce exposure as other companies have done.

The insurance industry is vital to the welfare of our country. Our industry allows individuals to spread their risk among thousands of other individuals by pooling their monies. It is the responsibility of the individual insurance carriers to maintain their ability to pay claims as they occur, as well as the ability to pay claims in the future with sound economic accountability.

STEVE BRAZIL, Agent

Farmers Insurance Group of Companies

Cape Girardeau