With the backdrop of the devastation in Haiti fresh in people’s minds, New York insurance regulators are not ruling out a similar event in their own state, a key reason they say insurers should promote the opportunity to buy coverage for such a devastating occurrence.

The New York State Insurance Department recently said that in terms of having a home or business property insured against earthquakes, the state “is probably not prepared,” noting that earthquake insurance accounted for $15 million of the $3.9 billion in total premiums written by property-casualty insurers in 2007. In 2008, the NYSID noted, the amount of earthquake policy premiums remained essentially the same.

James J. Wrynn

“Many people are probably unaware that standard homeowners’, renters and business insurance policies specifically exclude covering damage caused by earthquakes,” said New York Insurance Superintendent James J. Wrynn in a statement. “Coverage can be obtained, but it usually needs to be purchased as a separate policy or as an endorsement to an existing homeowners’ policy.”

Noting that New York has significantly less frequent damaging earthquakes than locations like California, the NYSID said dozens of small quakes have been felt in the city. The Federal Emergency Management Agency ranks New York City among the top 40 high-loss potential urban areas in the country, New York regulators added.

In New York, unlike in California, property insurers are not required to offer customers the opportunity to buy earthquake coverage, but Wrynn said, “people need to make informed decisions about buying any kind of insurance.

“They need to understand potential risks and their potential for financial loss should a disaster occur and then decide how best to protect themselves,” he said.

Premiums for such coverage, regulators said, are based on the type and age of the structure being insured, as well as characteristics including a structure’s proximity to known fault lines.

The Insurance Information Institute estimates that earthquake insurance for a brick home would likely cost between 60 cents to 90 cents per $1,000 of coverage in New York, compared to the Pacific Northwest where it would cost from $3 to $15 per $1,000 for a similar home, according to the NYSID.

The agency said cars and other vehicles are covered for damage caused by earthquakes under the optional comprehensive coverage part of an auto insurance policy.