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Earthquake insurance market is growing in Oklahoma

With an increase in the number of earthquakes, Oklahoma homeowners are adding earthquake coverage to go along with their standard insurance policies. The state’s market for earthquake insurance has almost tripled in the last five years.
by Paul Monies Modified: August 26, 2014 at 7:00 am •  Published: August 24, 2014

The market for earthquake insurance in Oklahoma has almost tripled in the past five years, driven by the higher numbers of quakes felt by state residents.

Oklahoma insurance companies wrote $13.1 million in premiums for earthquake coverage in 2013, up from $4.8 million in 2009, according to the Insurance Information Institute.

About 15 percent of homeowners in Oklahoma now carry earthquake insurance, which is either a separate policy or an endorsement to existing coverage. That’s up from an estimated 1 percent in 2011.

“More Oklahomans have purchased coverage in the last few years given what’s going on,” said Insurance Commissioner John Doak. “But the earthquake claims filed have been low, even with all this activity. And the payouts have been low.”

In 2013, 128 earthquake claims were filed in Oklahoma, according to the state Insurance Department. Payouts totaled $82,000. In 2014, 75 claims were filed through Aug. 1, with payouts totaling $22,000.

Coverage decreasing nationally

A recent survey by the Insurance Information Institute found just 7 percent of homeowners nationwide had earthquake insurance. That’s down from 10 percent in 2013.

Regionally, the residents in the West had the highest rate of earthquake coverage at 10 percent. Midwest residents were at 7 percent and South residents were at 6 percent. The Northeast had the lowest rate at 2 percent.

Even in California, home to some of the strongest earthquakes, just 12 percent of the state’s residents purchased earthquake coverage, the institute’s survey said.

As the market in Oklahoma has expanded, so has the need for reliable earthquake insurance information for consumers, Doak said.

“Be educated and learn what earthquake insurance could do for you,” Doak said. “We want Oklahoma consumers to have more insurance than what they need. These coverages are available for catastrophic risk.

“In Oklahoma, we don’t have much tall-building exposure; it’s mainly foundational risk in rural and urban areas. It’s much different than the multi-billion dollar property market in California.”

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by Paul Monies
Energy Reporter
Paul Monies is an energy reporter for The Oklahoman. He has worked at newspapers in Texas and Missouri and most recently was a data journalist for USA Today in the Washington D.C. area. Monies also spent nine years as a business reporter and...
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Oklahoma earthquake insurance

Direct premiums written for earthquake coverage:

2009: $4.84 million

2010: $6.76 million

2011: $9.53 million

2012: $11.68 million

2013: $13.11 million

Source: Insurance Information Institute


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