Rise in Oklahoma earthquakes means homeowners may want to consider insurance

Posted March 24, 2014 by Heather McGregor

Rise in Oklahoma earthquakes means homeowners may want to consider insurance

    By DYLAN GOFORTH World Staff Writer | Posted: Saturday, March 22, 2014 12:00 am       

Get the latest information on the state’s seismic activity at tulsaworld.com/earthquakes.

With earthquakes trying to take their place next to tornadoes on Oklahoma’s disaster mantel, the state’s insurance commissioner is encouraging Oklahomans to investigate if earthquake insurance is for them.

Less than 1 percent of Oklahomans carry earthquake insurance, state Insurance Commissioner John Doak said, for multiple reasons.

For one, he said, most homeowners don’t think they’ll be affected by earthquakes. However, a recent report stated that Oklahoma is now the second-most seismically active state in the country.

The other reason Doak suspects that earthquake insurance numbers are so low in Oklahoma is that people just don’t realize that they’re not already covered.

Earthquake insurance isn’t covered by traditional homeowners insurance.

“We’ve been working very hard to do education and awareness,” Doak said. “Earthquake insurance is very affordable and accessible, but most people don’t know they need it until it’s too late.”

U.S. Geological Service data show that Oklahoma has seen 83 earthquakes of a 2.5 magnitude or greater between Feb. 21 and March 21, and new quakes are recorded almost every day.

Most of those quakes occur in the central part of the state, on the Nemaha Fault Line, which runs from Omaha, Neb., all the way to Oklahoma City.

The number of quakes in central Oklahoma has increased so much in recent years that Rep. Mike Shelton, D-Oklahoma City, has proposed a bill two years in a row that would make it necessary for home insurance companies to educate homeowners on the benefits of earthquake insurance.

The proposal has failed both times, but Shelton anticipates proposing it again as he continues to learn about what’s causing the temblors.

“I don’t think it’s the state’s responsibility to force people to buy earthquake insurance,” Shelton said. “But I do think it’s our responsibility to ensure that people are very aware of if they’re covered or not. We are no more a tornado state than we are an earthquake state. … We have established ourselves as that, and we need to make sure consumers are aware of the pros and cons.”

The cause of the uptick in earthquakes isn’t known — a 2012 Seismological Society of America report states that the cause likely is man-made, but it didn’t pinpoint whether the surge is “related to either changes in extraction methodologies or the rate of oil and gas production.”

Doak said he thinks the number of Oklahomans with earthquake insurance will rise as the ground continues to shake.

Another factor that may deter people from purchasing the insurance is that although policies are typically inexpensive — less than $200 a year in most cases — the deductible can be quite high.

“If you have a $100,000 home, and a 10 percent deductible, you’re paying $10,000 for repairs,” Doak said. “For most Americans, their single largest asset is their home. I think it’s very important for consumers to be educated, no matter what part of the state they live in.”

Looking into earthquake insurance sooner rather than later may be a good idea, Doak warned.

Many policies typically have a “moratorium” or dead period — some up to 90 days — before they go into effect.

“I think that there are a number of people who think that earthquake damage will never happen to them, but when they try to sell their home, they’ll discover that it has,” he said.

Earthquake insurance

Insurance for earthquake damage isn’t part of your homeowners insurance, but you may be able to add it by buying an endorsement (a written change to your coverage) and paying an extra premium. Or you may buy a separate earthquake insurance policy.

Either way, it’s likely there will be important differences between your earthquake insurance and your homeowners insurance policy. Ask your insurance agent to explain those differences.

What is covered

  • Repairs needed because of earthquake damage to your dwelling and possibly other structures not attached to your house, like a garage.
  • Personal property against damage from an earthquake and possibly increased costs to meet current building codes and costs to stabilize the land under your home.
  • The cost to remove debris and for extra living expenses you may have while your home is being rebuilt or repaired.

What isn’t covered

Exclusions vary by insurance company, but typically, earthquake insurance won’t cover anything your homeowners insurance already covers.

  • Fire, even if it started because the quake ruptured a gas line.
  • Land, such as sinkholes or large cracks in your yard.
  • Vehicle damage, even if the quake caused damage to vehicles in your garage.
  • External water damage, such as sewer or drain backup, or flood water.

Source: Oklahoma Insurance Department

Oklahoma earthquakes in the past 10 days

Date Nearest location Magnitude
3/12 Medford 2.7
3/12 Chandler 2.6
3/12 Perry 2.5
3/12 Perry 2.5
3/12 Medford 2.5
3/13 Medford 2.5
3/13 Perkins 2.9
3/13 Guthrie 2.6
3/14 Stillwater 2.8
3/14 Medford 2.8
3/14 Medford 2.7
3/15 Medford 2.9
3/15 Medford 2.8
3/15 Medford 2.9
3/15 Medford 3.0
3/15 Guthrie 2.5
3/17 Choctaw 3.3
3/17 Langston 3.1
3/17 Nicoma Park 2.6
3/17 Crescent 2.7
3/17 Langston 2.9
3/18 Chandler 2.5
3/18 Medford 2.5
3/19 Medford 3.1
3/19 Crescent 3.1
3/19 Crescent 2.9
3/19 Perkins 3.4
3/20 Medford 2.6
3/20 Medford 3.1
3/20 Langston 3.2
3/20 Langston 2.6
3/20 Guthrie 2.8
3/20 Enid 3.3
3/21 Crescent 2.9
3/21 Guthrie 2.7
3/21 Yale 2.7
3/21 Guthrie 2.9
3/21 Langston 2.6
3/21 Langston 2.8
3/21 Langston 4.0