You’ve heard of “the Big One,” the earthquake that could hit California any day now. You may also have heard of a similarly imminent quake that some predict will devastate the Pacific Northwest in the not-so-distant future.

You may not have heard about the one a number of geologists suggest may ravage the Midwest someday soon. Which makes sense, as unlike California, the central portion of the US isn’t known for its seismic activity.

In fact, a really big quake hasn’t hit the region for more than 200 years. Since then, a number of smaller ones have shaken states like Arkansas, Illinois, Kentucky, Missouri, and Tennessee. But none of them have been as major as the four that jolted much of the Midwest -- via the New Madrid fault -- in late 1811 and early 1812.

Each of those earthquakes were magnitude 7.0 or greater, according to the United States Geological Survey (USGS). Although they didn’t cause much damage, that’s only because there wasn’t much to damage back then.

That Was Then, This is Now

If the same series of tremors rocked the Midwest today, the result would be far more dramatic.

For example, the Federal Emergency Management Agency and the Mid-America Earthquake Center of the University of Illinois predicted in 2009 that a major Midwestern quake could:

  • damage 715,000 buildings and 3,500 bridges
  • leave 2.6 million households without electricity and 1.1 million households without water
  • displace over 7.2 million people within three days of the event
  • injure 86,000 people
  • kill 3,500 others

As for how much all of that damage would cost the region’s insurers and homeowners, a recent report from Zurich-based reinsurer Swiss Re suggests $300 billion isn’t out of the question. Insurance companies would be sent about half of that bill, by the way, while uninsured home- and business-owners would have to deal with the rest.

(If you live in this part of the country and you don’t have earthquake coverage, you may want to start looking for it.)

Why Midwesterners are at Risk

What makes the Midwest so susceptible to a destructive and expensive quake? Swiss Re points to three issues in particular:

  • Its geological make-up “allows seismic waves to travel large distances with minimal loss of energy. Plus its soft soil can exacerbate the duration and intensity of seismic shaking.”
  • There are 47 million people and five major metropolitan areas in the region. Which means a lot of residential and commercial buildings could be damaged or toppled by a strong tremor. And most of them weren’t built or haven’t been retrofitted to withstand such shaking.
  • Physical damage isn’t the only thing Midwestern home- and business-owners have to worry about when it comes to a mega-quake occurring. A couple of cases in point:businesses would lose revenue while offline for an extended period. Demand for contractors and supplies would outrun supply, causing price inflation, and the claims handling process would be complicated by disputes over things like event definitions and deductibles.”

Insurers Unprepared

All of that adds up to a big deal for both insurers and their customers who live in the Midwest.

For insurance companies, the main issue is that over a third of the loss estimate included in the Swiss Re report “is attributed to the multiple effects of large earthquakes occurring one after the other, something that wouldn't be seen in a single, isolated earthquake.”

Although “most insurers, reinsurers, rating agencies, and policymakers are prepared for one large New Madrid earthquake,” it adds, Swiss Re's “not at all certain that they're prepared for more than one."

Homeowners Unprepared, Too

By most accounts, Midwestern consumers aren’t prepared for even a single quake.

“It is very uncommon to find [people] who currently have earthquake insurance,” says Chuck Schramm, a producer with the insurance firm Lamb Little & Co. Ltd., in Rolling Meadows, Illinois.

Missouri proves that point. In the part of the state that’s nearest the New Madrid seismic zone, only one in five homeowners has earthquake insurance, says the state’s Department of Insurance, Financial Institutions and Professional Registration (DIFP). Fifty percent of New Madrid homeowners had that coverage in 2008, while more than 60 percent had it in 2000.

Admittedly, part of this market contraction can blamed on Missourians not trusting or believing an earthquake could impact their area. Another part, though, is due to insurers simply leaving the market or refusing to issue new policies in that high-risk portion of the state.

And then there’s the fact that the coverage offered to this region’s residents tends to be expensive. Really expensive. According to the Missouri DIFP, the price of earthquake insurance has grown by more than 500 percent in some of the state’s counties over the last 15 years. Also, it isn’t unusual for earthquake insurance deductibles to be up to 20 percent of a home’s value.

“When insureds are told about a potentially devastating loss potential with a very low frequency, they are unwilling to pay anything more than a minimal amount for the coverage,” Schramm says.

Not Everyone Believes a Midwestern Quake is Imminent

The good news for anyone who calls Missouri or some other Midwestern state home: not everybody thinks a “Big One” is just around the corner. Seth Stein is one example.

“There's no reason for great concern about earthquakes in the Midwest,” says the Northwestern University seismologist. (He’s also the author of “Disaster Deferred: How New Science is Changing Our View of Earthquake Hazards in the Midwest.”)

“Earthquakes that cause minor damage occur about once every 20 years,” Stein adds. “The largest in the past hundred years, a magnitude 5.5 quake that occurred in southern Illinois in 1968, caused no fatalities. Only minor damage occurred; fallen bricks from chimneys, broken windows, toppled television aerials, and cracked or fallen brick and plaster.” 

The largest earthquake to hit the region since then was a magnitude 5.2 quake in 2008. It shook buildings in Chicago and was felt as far away as Kansas and West Virginia, but caused only minor damage near its epicenter in southern Illinois, Stein shares.

Of course, the tremor being talked about here is supposed to be a lot bigger than a 5.2 or 5.5.

Specifically, the USGS estimates there’s a 7 to 10 percent chance one that’s a magnitude 7.5 or greater will hit the region in the next 50 years. The probability of one that’s more than a magnitude 6 striking within the same period: 25 to 40 percent.

Looking Beyond the Hype

Even then, Stein isn’t sure it warrants all the current hype and fear. Why? “We know enough about what happened [during and after the 1811 and 1812 quakes] to take a calm view” of the ones that may hit the region in the near or distant future.

“Historical accounts show that damage was minor except close to New Madrid,” he explains. “About 100 miles [away] in Ste. Genevieve, Missouri, the shaking caused no major damage. Similarly minor damage with ‘no real injury’ occurred in Nashville, 160 miles away, [and the same was true in] Louisville, Natchez, and Vincennes. No damage occurred in Fort Wayne, Wheeling, Asheville, Brownsville, Norfolk, or Detroit. In the Kentucky hills south of Cincinnati, many families slept through the shock. This gives good insight into what would happen if such an earthquake were to occur again.”

In fact, Stein says “if such an earthquake occurred today, the best estimates are that there might be 10 to 100 fatalities. Significant property damage would occur in areas like Memphis, and minor damage would occur over a larger area.”

He also reminds that “earthquakes aren't a major cause of deaths in the US. Many more deaths result from familiar causes like drowning, fires, or bicycle accidents. Severe weather disasters are about 25 times more dangerous than earthquakes. Earthquakes rank at the level of in-line skating or football.”

Still, It Can’t Hurt to Prepare

As a result, Stein suggests “the probability of damage is small enough that it's not worth major concern.”

For example, “it's hard to see how homeowners could come out ahead by doing retrofits or buying earthquake insurance, especially because earthquake insurance has large deductibles. The odds are high that one would never experience enough damage to collect.”

Still, Stein adds, in higher risk areas like New Madrid or Memphis, “insurance and minor preparation, such as securing water heaters, might make sense.”

If you live in one of these higher risk areas, take a few moments to compare homeowners insurance policy rates from at least three companies to make sure you get the best price on the amount and type of home protection you need.