Seismologists at the U.S. Geological Survey recently warned that the ongoing earthquake swarm in central-Oklahoma is likelyto continue, could get worse, and might be linked to wells oil and gas companies use to store drilling waste-fluid deep underground.
In response, Oklahoma Insurance Commissioner John Doak advised Oklahomans to buy earthquake insurance.
Oklahoma already has highest average cost for homeowner’s insurance, thanks, in part, to frequent hail, floods, high winds, tornadoes and wildfires — disasters many Oklahomans are well-versed in. But earthquakes are a new experience for many Oklahomans, as are the the related financial costs of preparedness.
Here are five things Oklahomans should know about earthquake insurance.
1. ALMOST NO OKLAHOMANS HAVE IT
Less than 1 percent of Oklahomans carry earthquake insurance, according to commissioner Doak.
2. MANY OKLAHOMANS MIGHT NOT KNOW THEY DON'T HAVE IT
Earthquake insurance has to be purchased separately from standard homeowner’s policies, The Oklahoman‘s Paul Monies reports:
Earthquake insurance is either an endorsement added to existing coverage or a separate policy from another insurance company.
In response to the quakes and complaints from constituents, State Rep. Mike Shelton, D-Oklahoma City, says he will refile a bill requiring insurance companies to alert Oklahomans whether their policies cover earthquake damage.
Shelton filed the bill last year, the Associated Press reports:
Shelton says the measure was opposed by the insurance industry and died in a House committee.
3. POLICIES ARE CHEAP...
A typical Oklahoma homeowner will likely pay $100 to $150 per year for earthquake coverage, says Commissioner Doak. Earthquake policies usually cover structure repairs, damage to personal property, and debris removal.
4. ...BUT DEDUCTABLES ARE HIGH
Deductibles for earthquake damage claims are usually higher than standard homeowners’ insurance claims — usually 5 to 10 percent of a home’s value, Monies reports:
At 10 percent, out-of-pocket costs to repair earthquake damage would be $12,000 for a $120,000 house, the median home value in Oklahoma County.
5. YOU MIGHT HAVE TO WAIT MONTHS FOR COVERAGE
Due to the likelihood of aftershocks, most insurance companies enforce a post-earthquake “lockout period” that has to expire before homeowners can add coverage The moratorium is usually 30-60 days, but could be as high as 90 days.
The size of an earthquake that triggers a lockout period varies between insurers, too, but Lance Singleton, the Chief Financial Officer for the Oklahoma Agency Alliance, tellsNews9?sHeather Hope many insurers start the clock after a 4.0-magnitude or greater temblor.
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