The New Jersey Quake: A Wake-Up Call for Seismic Preparedness and Resilience

Earthquake Insurance: A Critical but Often Overlooked Coverage

Last week's earthquake in Lebanon, N.J., underscored the importance of earthquake preparedness, mitigation, and insurance in areas not traditionally associated with seismic activity. Earthquake insurance is not covered under a standard homeowners policy. According to A.M. Best, $250 million in direct premiums written for earthquake coverage was in force in Connecticut, New Jersey, and New York in 2023, accounting for less than 5 percent of U.S. earthquake coverage premiums.

Structural Safety and Community Resilience

The most significant impact occurred in Newark, N.J., where three multifamily row homes were declared uninhabitable because of potential structural damage, displacing dozens of residents. However, on Saturday morning, the properties were declared structurally safe and residents were allowed to return. Earthquakes large enough to be felt by a lot of people are relatively uncommon on the East Coast. Since 1950 there have been about 20 quakes with a magnitude above 4.5, according to the United States Geological Survey. That's compared with over 1,000 on the West Coast.

Investing in Mitigation and Resilience

Last week's temblor also should drive awareness of the need for Congress to reauthorize the National Earthquake Hazards Reduction Program (NEHRP) – a federal program that helps mitigate earthquake damage to buildings and communities. The NEHRP expired in September 2023. Bipartisan legislation to reauthorize the program was introduced in January 2024. Investment in knowledge, time, and money prior to a severe disaster is significantly less than the cost to help communities recover from a major threat.

For homeowners, discussing with insurance professionals whether earthquake coverage is right for them is crucial. Additionally, communities should invest in structural improvements and resilience programs to minimize damage and ensure quick recovery in the event of an earthquake.