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Does anyone or the U.S. government offer earthquake insurance when a major carrier will not?

Feb. 3, 2007

Home Insurance Forum

Question:

I recently spoke to my State Farm home insurance representative about earthquake insurance. She stated that most insurance companies had "tightened up" their requirements for a homeowner to be eligible. Specifically, the newer requirements have to deal with the foundation (are the piers tied to the outer curtain wall) or is the home on a slab. After speaking with the representative, she agreed that 98 percent of the homes in South Carolina do not qualify due to the above requirements. Does anyone or the U.S. government offer earthquake insurance when a major carrier will not?

Dave, South Carolina

Answer:

Dear Dave,

According to Phil Supple, a spokesperson for State Farm, your State Farm representative "misspoke" when she said 98 percent of South Carolina homes wouldn't qualify for earthquake insurance. But Supple also said he doesn't believe 100 percent of homes in South Carolina would qualify.

"There was a sizable earthquake in South Carolina in 1886," he explains. "So, there is that history of earthquakes. We looked at the building codes and their earthquake resistance, and, in terms of earthquakes, we feel they're fairly lax."

According to Supple, because of that earthquake history and the state's building codes, anywhere from 40 to 50 percent of homes in South Carolina would not meet State Farm's earthquake underwriting criteria and, as such, would not be eligible for State Farm's earthquake insurance. Clayton Ingram, public information officer for the South Carolina Department of Insurance, agreed that homeowners in the coastal areas of the state, especially around Charleston, could be experiencing some difficulty in finding insurance.

South Carolina does not have a state earthquake insurance program, nor is there a federal earthquake insurance program for those who don't qualify for insurance on the private market.

But that doesn't mean that no one will insure you. One option is to look for a different insurance company. You can contact the Independent Insurance Agents of America to find an independent insurance agent in your area. Another choice is to contact the South Carolina Department of Insurance's customer service department, which can offer some assistance in finding an insurance carrier. They can be reached toll-free within the state at (800)768-3467 and nationwide at (803)737-6180.

You may also want to look at our stories on The basics of earthquake insurance and Earthquake insurance overview.

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Disclaimer: We are journalists, not financial planners or insurance brokers. Nothing we say should be interpreted as a recommendation to buy or sell any insurance product, or to provide other financial or legal advice.

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