EQ Policy Renewal Increase - Should we continue coverage?

[Greg Franck]

I recently received my EQ policy renewal for a four family building in STL. The renewal included a deductible increase from 10% to 15% of replacement cost. This amount is into the 6 figure range meaning that I will need to come out of pocket with an amount greater than my initial investment in the building in the event a major earthquake would destroy the building. Based on this I am considering going naked in regard to EQ coverage for this specific property. Obviously geographically the risk of a major earthquake is real with the New Madrid fault being close by.

I wanted to get some thoughts from those folks who know the insurance industry on a few points:

- What if anything does a standard property policy cover (less the EQ endorsement) in the event a building sustains damage from an EQ event.

- Are there any other endorsements / options that can be added to a standard policy which act as a substitution or supplemental for an EQ policy?

- What are my real risks in the event that the building is destroyed in an earthquake event and I DO NOT have coverage?

During this initial research I read several articles which state that coverage in high risk states has significantly declined since 2015 due to policy rate / deductible increases such as what I am outlining above. Additionally it seems that even if the event is declared a Federal Diasater, FEMA would offer little if any assistance for Earth quake events.

Before making a decision either way I just want to make sure I am properly informed about the risks.

I appreciate your feedback!