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New York City on brink of earthquake?

Most people think of California when they think of earthquakes – and now Haiti and Chile. But New York? It turns out even New Yorkers could get a good shake – and they may be least prepared for it.

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The New York State Insurance Department recently issued an advisory about the potential for earthquakes in the state. The advisory points out that while the U.S. Geological Survey puts New York in the "moderate" risk category, there have been more than 400 quakes in the state from 1760 to 1986 – an average of 1.8 a year.

While this may seem like a small risk, consider this: In 2001, two minor but historic quakes were recorded in New York City. Although these quakes measured only 2.4 and 2.6 on the Richter scale, their epicenters were within the boundaries of Manhattan – the first ever since modern recordkeeping began, according to Columbia University's Lamont-Doherty Observatory. The last major earthquake, with a magnitude of 5.1, occurred in the northern part of the state in 2002.  

Also, a 2000 report commissioned by the New York City Area Consortium for Earthquake Loss Mitigation showed that there are many pockets of Manhattan composed of soft soil over hard rock – an unfortunate combination that amplifies shaking during quakes.

The city's high-rise buildings are often built to withstand earthquakes, but the older brownstone homes are not – bad news for residents, many of whom likely have never even pondered earthquake insurance. In the event of quake damage, home insurance would not pay; one needs to purchase an earthquake insurance policy or an endorsement to home insurance in order to secure coverage. New York insurance companies are not required to offer earthquake insurance to customers, unlike California, where offering it is the law.


Weighing the risks

If you're a risk-averse New Yorker who’s wondering about purchasing earthquake insurance, here are some factors to consider:

  • Do you live in New York City? The city's high density of people and buildings make the Big Apple ripe for significant financial loss due to quake damage.
  • The Insurance Information Institute estimates that the cost of insuring a brick home is about 60 to 90 cents per $1,000 of coverage, far below the cost of coverage in some earthquake-prone states.
  • University of Buffalo geology professor Dr. Robert Jacobi believes a 6.5-magnitude quake is possible in western New York, according to the New York State Division of Military and Naval Affairs. For comparison, the Northridge, Calif., earthquake in 1994 registered 6.7.

Deductibles on earthquake coverage are often high – that's the nature of catastrophic coverage. You should be prepared to pay anywhere from 2 to 20 percent of the cost of rebuilding your home.

If you decide to purchase earthquake insurance, buy enough to cover the cost of rebuilding your house and replacing damaged possessions. The amount of coverage you buy should be based on replacement and reconstruction costs, not the real estate market value of your property.

About the author: Megg Mueller is a journalist with almost two decades of experience. She has worked as a reporter and editor for the Reno Gazette-Journal, as editor of health care and education manuals for Aspen Publishers, a subsidiary of Wolters Kluwer and wrote a weekly column on the hotel industry during her tenure as assistant travel editor for USATODAY.com. Mueller is the editor of a tourism-based Web site and also serves as a reporter for a weekly business newspaper.

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