New Measure To Protect Oklahomans With Earthquake Insurance

Friday, March 6th 2015, 7:08 pm
By: News 9

More and more Oklahomans are buying earthquake insurance, but, so far, it doesn't seem that many earthquake claims are being paid.

That's a concern for Oklahoma Insurance Commissioner John Doak. Earlier this week, Doak issued a bulletin that he hopes will protect the increasing number of Oklahomans who have earthquake insurance.

In 2011, according to the Insurance Journal, two percent of Oklahomans had earthquake insurance. It is now 15 percent.

In general, Commissioner Doak said these policies do not cover induced seismicity, that is, any earthquake caused by oil and gas activity.

When Doak learned that of the approximately 100 earthquake claims filed last year in Oklahoma, eight had been paid, he worried that insurance companies "could be denying claims based on the unsupported belief that these earthquakes were the result of fracking or injection well activity."

Doak went on to say that he felt it was important to be proactive and put insurance companies on notice: "to send a message to the insurance companies to say, one, we want you to pay these claims unless there's a specific exclusion that's already in your policy that says you're not going to."

Doak also spoke of the importance, during this time of uncertainty and evolving policy, of educating both the insurance professionals and also consumers.

There are about 14,000 licensed insurance agents and adjustors in the state who are now required, under state law, to complete a continuing education course on earthquake insurance. Since January 1, when the course first became available, 2,500 have taken the course.

"You don't want somebody that's been one of our good auto adjustors to be adjusting your front porch or the second story of your home," said Doak, "determining if there's structural damage."

Doak said it's just as important for Oklahoma consumers to practice "Buyer beware" and read their policies carefully, so that they don't have unrealistic expectations about what's covered. And he says, in most cases, minor damage is not going to be covered by an earthquake policy.

"Earthquake coverage is really catastrophic coverage, if your home goes to the ground," said Doak, "but again, it's not covered under your current forms of your policy, so you have to add it."