Oklahoma residential property owners will have to be the ones to check to make sure their property insurance policies include earthquake coverage.
The House of Representatives Insurance Committee voted 7-4 Thursday not to pass House Bill 2863, which would have required insurance agents to notify new and existing policyholders whether their insurance policy covers damage caused by earthquakes.
“There's responsibility on the side of consumers,” said Rep. Charles Key, the committee chairman. “There wasn't demonstrated a real need to require the insurance agent or the company to make notification beyond what they're required to do today.”
Requiring insurance companies to provide an information form to policy holders on whether their coverage includes damage from earthquakes would be an added cost to insurance companies, which would pass them onto consumers, said Key, who is also an insurance agent.
“There's a cost associated with it,” said Key, R-Oklahoma City. “The best way to allow transactions between people to occur is to allow freedom, which also requires responsibility.”
Insurers criticize bill
Dan Ramsey, president and chief executive officer of the Independent Insurance Agents of Oklahoma, said property insurance policies clearly state what isn't covered.
“It's not hidden away,” he said. “The consumer has a responsibility. They should read their policy.
“The notification requirement — all that does is create additional paperwork and administrative requirements on insurance agents,” said Ramsey, whose organization represents about 500 independent insurance agencies in Oklahoma.
Rep. Mike Shelton, the bill's author, said his bill ran into opposition from insurance companies. Three committee members who are insurance agents voted against his bill.