A recent 2.2 magnitude earthquake near Summerville has reignited discussions around the importance of earthquake insurance and a state lawmaker’s ongoing effort to require insurance companies to provide greater transparency about coverage options.
The Earthquake and Its Implications
The tremor struck just before 10 a.m. on Wednesday and was reported by the U.S. Geological Survey. Although earthquakes are not uncommon in South Carolina, with an estimated 10 to 15 occurring annually, they often go unnoticed by most people. Around 70% of these tremors are clustered in three areas: Ravenel-Adams Run-Hollywood, Middleton-Place-Summerville, and Bowman.
While small earthquakes typically don’t cause significant damage, even minor shifts in the ground can gradually stress a home’s foundation, leading to potential long-term damage. Experts agree that although it is difficult to predict the exact time or place of an earthquake, areas that have experienced earthquakes before are at risk for future events.
The Need for Earthquake Insurance
Unlike other types of damage, most standard homeowners and rental insurance policies don’t cover earthquake-related harm. However, adding earthquake coverage is straightforward—it can be added as an endorsement to an existing homeowners’ policy or as a stand-alone policy.
“Consumers can purchase earthquake coverage as an endorsement to their existing homeowners’ policies or as a stand-alone policy,” said Michael Wise, Director of the South Carolina Department of Insurance. “Since earthquakes can cause extensive structural damage, having this coverage ensures that you’re not left facing major expenses alone.”
Lack of Awareness About Coverage Options
State Representative Gil Gatch (R-Summerville) has been advocating for greater awareness of earthquake insurance options. He noted that many homeowners don’t even realize that earthquake coverage is available to them.
“I’m glad nobody was hurt, but it’s a good reminder that, you know, we aren’t often thinking about earthquake insurance,” Gatch told News 2 after the recent quake. “We just need people to know that it’s offered.”
In 2021, Gatch introduced a bill that would require insurance companies in South Carolina to inform homeowners about the risk of earthquakes and the availability of coverage. Under his proposed legislation, insurers would have to offer the option for earthquake coverage, similar to the requirement for underinsured motorist coverage. Homeowners would then have the choice to opt in or out of the coverage, and if they chose not to, they would have to sign a waiver.
“I’m not demanding that insurance companies offer products that they don’t offer, but I think that if they offer it, they need to let their people know that we sit on the fault and this is an option that they have to purchase,” Gatch explained. “If they don’t want extra coverage, they can just sign a waiver.”
Industry Pushback and Challenges
While Gatch’s bill has not yet advanced in the legislative process, a representative from the South Carolina Insurance Association raised concerns about the practical implications of such legislation. The association argued that requiring insurers to collect and retain signed declinations from every policyholder could create unnecessary complications.
However, Gatch remains hopeful that the bill will receive attention at the start of the next legislative session.
The Risks of Not Having Earthquake Coverage
The South Carolina Department of Insurance (DOI) continues to encourage residents to consider adding earthquake coverage to their policies. Despite no recent major earthquakes, studies have shown that many buildings in South Carolina are vulnerable to seismic activity. In fact, a 2001 study found that a significant earthquake in the Charleston area could cause more than $20 billion in damage and result in thousands of injuries or fatalities.
Gatch stressed the importance of educating people about earthquake risks and coverage options before a disaster strikes. He noted that many people often wish they had known about available coverage only after a catastrophe occurs.
“The citizens are going to be better served if they at least know that it’s available,” Gatch said. “It’s only after a tragedy or catastrophic event that we say, ‘Well, I wish I would have known.’ This is an opportunity to make sure that people who are purchasing insurance on their homes and businesses know.”
How to Get Earthquake Coverage
South Carolina residents interested in learning more about earthquake coverage or purchasing additional protection can contact the DOI’s Office of Consumer Services at 803-737-6130. They can also connect with an insurance agent in their area for more information.
