The cost for earthquake insurance is going up in Missouri.

Officials say the rates could double, triple, or even quadruple this year for many businesses and homeowners because of a decision by a New York insurance rating firm.

The Insurance Services Office filed rate increases ranging from 113 to 266 percent for much of Southeast Missouri and the St. Louis metropolitan area.

In some cases, the insurance rating firm's filing would allow insurers to almost quadruple some residential and commercial rates in parts of the state, said Randy McConnell, a spokesman for the Missouri Department of Insurance.

Missouri Insurance Commissioner Jay Angoff has ordered a special examination of the rating firm's filings to determine if the organization can justify its recommended rate hikes.

"A rate increase of this magnitude deserves special scrutiny," Angoff said. McConnell added that insurers have never paid a substantial earthquake claim in Missouri, despite collecting $30 million a year in premiums.

"State law does not allow the Missouri Insurance Department to suspend or reject the ISO filing, despite the size of the rate increase," said McConnell. However, after studying the suggested increase, the insurance department can hold a public hearing and issue an order after determining whether the rates are reasonable.

The rating firm is in an unusual position in the Missouri insurance industry. It is allowed to file rates for commercial and residential insurance that automatically take effect for all its members unless they file deviations with the department.

This practice, said McConnell, is not subject to anti-trust laws, unlike most other industries and services.

So rating firm filed the commercial rate schedule Dec. 15, which went into effect Jan. 1, with rates increasing from 38.1 percent in some areas to 395 percent in other areas.

But not all insurance rates will increase because not all companies are members of the Insurance Service Office.

"The ISO rate hike does not guarantee an individual's insurance premium will go up," said McConnell. "Many larger companies have their own rating systems."

But rating firm does have 392 members. McConnell said the state fears rates for earthquake coverage could rise throughout the industry because of rating firm's request.

Based on insurance company data, said McConnell, the new rates could increase the cost of average residential coverage in six Southeast Missouri counties from $43.50 to $114 a year for a $50,000 home.

Rates in Dunklin, Mississippi, New Madrid, Pemiscot, Scott and Stoddard counties are already among the state's highest and could increase 162 percent.

All of the counties in the immediate Southeast Missouri area are designed by territory numbers, ranging from 1 through 10. Rate increases are designated according to numbers.

Cape Girardeau County is rated Territory 9, which is in the 113 percent increase area.

Pemiscot, New Madrid and Dunklin counties are in territories 1 through 3 range, and portions of Mississippi, Scott and Stoddard counties are in the Territory 3 range.

Southeast Missouri lies along the New Madrid fault, which caused extensive earthquake damage in 1811 but has been largely dormant since.

However, a number of smaller tremors -- the 1811 quake was estimated at 8.8 on the Richter scale -- have been reported during the 1990s. Three tremors of more than four points on the Richter scale have been reported in Southeast Missouri and Southern Illinois during the past seven years. Hundreds of minor tremors are recorded throughout the New Madrid Fault each year.

More than a year ago, an earthquake study group from Memphis, Tenn., said there was a 68 percent chance of "a big one" in the fault area within the next 15 years.

The rating firm used state-of-the-art computer models to assess the danger of a major quake, said spokesman Dave Dasgupta. "The New Madrid fault is considered one of the top earthquake-prone regions in the country," he said.

The rating firm files recommended rates in Missouri for nearly 500 insurance companies, most of them small players in the Missouri market.

However, the move doesn't directly affect rates charged by the largest insurers, including State Farm. State Farm, which insures one in four Missouri homes, didn't discuss its plans for rate changes.

State insurance officials, however, suspect the bigger players will follow the Insurance Services Office's lead.

Earthquake insurance

Territory numbers and earthquake insurance rate increases have been filed by the Insurance Services Office Inc. for commercial and residential property in Missouri. Commercial rates went into effect Jan. 1, and residential rate changes will start July 1.

Rate increases per territory number:

Territory Commerce Resident

1 395% 161.6%

2 390% 161.6%

3 380 161,6%

4 360 161.6

5 340 161.6

6 295 161.6

7 255 170.9

8 295 262.0

9 155 112.7

10 35 39.1

Territory ranges:

Bollinger, 6 to 9.

Butler, 4 to 8.

Cape Girardeau, 9

Carter, 9

Dunklin, 1 and 2.

Franklin, 9 and 10.

Iron, 9

Jefferson, 8 to 10.

Madison, 9.

Mississippi, 2 and 3.

New Madrid, 1 and 2.

Pemiscot, 1.

Perry, 9

Ripley, 7 to 9.

Scott, 3 to 7.

Stoddard, 3 to 8

St. Louis, 9

St. Louis City, 8 and 9.

St. Francois, 9

Ste. Genevieve, 9