Oklahomans are finding the ins and outs of earthquake insurance confusing.
Many in Oklahoma are unsure whether their insurance companies will cover earthquake damage, according to Oklahoma City news station KOCO.
Last month, Oklahoma Insurance Commissioner John Doak asked insurance companies to send letters to policyholders with earthquake endorsements, clarifying what was covered. But commission spokesman Buddy Combs told KOCO that the process caused more confusion with clarity when all insurance policyholders – regardless of whether they had an earthquake endorsement – ended up getting the letter.
“What we were trying to do by sending that letter to insurance companies was clarify a lot of the confusion that has surrounded this,” Combs told KOCO. “And it has caused a little bit more confusion for policyholders. But part of that is going to be good for them to work through those issues.”
Combs said the commissioner’s office has been flooded with calls from policyholders wondering what their insurance covers.
“The biggest frustration is whether they’re going to get coverage under certain man-made exclusions under their policy,” Combs said. “Their biggest question is regarding fracking and oil and gas activity.”
Oklahoma’s energy regulator said in November that the state now has more earthquakes than anywhere else in the world, according to a Huffington Post report. That’s a new situation – earthquakes in the state have gone from zero in 2001 to 680 last year. Scientists have linked the quakes to wastewater injection, a waste-disposal method used in oil fracking.
Most earthquake endorsements cover only catastrophic damage, according to KOCO. That means lesser quake damage is on the policyholders.
“Each company is different, depending on the policy and the coverage they have,” Combs said. “We’ve seen deductibles from 2% to 10% on the home’s value.”
