Earthquake insurance hot in Oklahoma as purchases skyrocket

While more Oklahomans are purchasing earthquake insurance, the niche industry is still plagued by affordability and payout issues

Insurance News

By Lyle Adriano

According to data from SNL Financial, there are now more Oklahomans buying earthquake insurance. Another report, however, discovered that only a few have actually filed for claims and insurers have not paid out on most of them.

SNL Financial noted that the percentage of direct premiums written for earthquake insurance coverage increased by 25%, from $13,107 million in 2013 to $16.437 million in 2014.

On the other hand, Oklahoma Insurance Department’s data revealed that from January 2015 to March 2015, of the 109 earthquake claims filed in the state, only 18 were paid.

Most policies being offered have high deductibles, and will not cover for damage caused by fracking-related tremors. These two things have discouraged many who have considered earthquake insurance, in light of the recent tremors.

"Within the last year or so, yes, we've definitely got more calls after earthquakes, but a lot of times when people find out that the deductibles are high or the coverage doesn't cover masonry damage, they find that maybe it's cost prohibitive," CPC Insurance Agency Inc. managing partner Chris Paine remarked.

Oklahoma Insurance Commissioner John Doak reasoned that many earthquake insurance policies have high deductibles since they only pay out for catastrophic damage to property. “It's always frustrating that the higher the value of the home, the larger the deductible is going to be,” he said.

Doak reassured consumers worried about having to pay a fortune to secure their homes, saying that there are affordable insurance options with deductibles as low as 2% of a home’s value.

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