Quake insurance jumps 200%

Nationwide Mutual Insurance Co., the state's second-largest provider of earthquake insurance, is sharply increasing its rates for covering tremor damage in South Carolina.

Customers who renewed their earthquake policies after Feb. 6 saw the higher premiums in their billing statements. A local resident contacted The Post and Courier recently to complain that his annual cost for earthquake coverage skyrocketed more than 200 percent, to $475 from $158.

Nationwide media relations manager Charley Gillespie said the statewide increase followed the insurer's routine evaluation of its business strategy.

"This is just having to do with the risk that's specific to South Carolina," he said.

Gillespie said Nationwide's decision to raise its rates was unrelated to the recent string of earthquakes that rocked Haiti, Chile and Japan.

The exact number of homeowners who will be affected by the sharp increase was not available.

Generally, between 10 percent and 15 percent of homeowners in South Carolina buy earthquake insurance along with their standard property-and-casualty policies, said Allison Dean Love, an industry consultant.

She added that earthquake coverage has been relatively cheap to buy in South Carolina, which could prompt some carriers to raise rates as they re-evaluate their risk.

Nationwide provides earthquake insurance to 11 percent of Palmetto State homeowners who buy the optional coverage, according to data filed with the S.C. Department of Insurance.

State Farm, the state's largest earthquake insurance provider, said it has no immediate plans to raise its rates.

Homeowners across the state spent about $25 million on earthquake premiums in 2008, which is the most recent figure available.

Parts of the Lowcountry sit atop several major fault lines, which shift to create a few small temblors each year. The Charleston region has a 12 percent chance that an earthquake of 5.0 or greater magnitude will strike during the next 50 years, according to the U.S. Geological Survey.

The area's most damaging earthquake on record hit in 1886, killing 60 people and flattening buildings with its 7.3-magnitude intensity.

The S.C. Emergency Management Division estimates that if a 7.3-magnitude earthquake struck the region today, nearly 70,000 homes throughout the Southeast would be affected and the Charleston area would suffer financial damage of $10.9 billion.