Insurance Insights
September 1-7, 2014
The Napa earthquake and you
By Jay Bradford
www.insurance.arkansas.gov
The 6.0 earthquake which struck the Napa Valley this past weekend is expected to cost over $1 Billion in damages to both commercial and residential properties. The news reports which I have seen indicate some structures were knocked off their foundations, while others experienced cracks in chimneys and falling brick veneer. As I have said many times in this column, most standard homeowners policies do not cover earthquake damage. Like flood insurance, it usually must be purchased separately. There are experts who predict Arkansas will experience a catastrophic earthquake within the next few decades and new maps show the damage may expand further west in the state than previously thought.
The Arkansas Insurance Department began work in 1999 to assess the earthquake insurance market. Following this analysis, which was conducted by a large brokerage firm, the Department began working with numerous brokers to develop the MAP or Market Assistance Program. The MAP provides monoline earthquake coverage for residences through a surplus line company which has been successful at writing coverage in nearly all 75 counties in the state, thus gaining a good mix of business.
Licensed resident agents must submit the applications to Argenia which is the broker for the program. If an insurer does not offer earthquake coverage, they are required to provide notice to their insureds that coverage is available through the MAP and they must direct their insureds to an agent for assistance.
There is a tool on the Arkansas Insurance Department’s website that can provide some general idea of what it might cost a consumer for earthquake coverage. You can go to http://www.argenia.com/map/eq_quote.php and plug in general information about the construction of your property and whether or not it is residential or commercial. This pricing is for information purposes only.
Being prepared for a potential earthquake also means considering whether you should acquire earthquake insurance. If you decide you should, please talk with your agent about the coverage possibilities that fit your circumstances.
The Arkansas Insurance Department is located at 1200 West Third Street in downtown Little Rock. 1-800-852-5494. www.insurance.arkansas.gov
Jay Bradford was appointed Arkansas Insurance Commissioner by Governor Mike Beebe on January 15, 2009.
