Oklahoma earthquakes stir interest in insurance coverage

A standard homeowners' insurance policy does not cover earthquake damage.
by Don Mecoy Published: November 7, 2011

Suddenly Oklahomans are interested in earthquake insurance.

After much of the state felt Saturday's largest-ever recorded quake, a magnitude 5.6 centered near Prague, and some rumbling aftershocks, residents began calling their insurance agents.

Dan Ramsey, president of Independent Insurance Agents of Oklahoma, said many agents were scrambling Monday trying to find earthquake insurance providers.

“They're getting the calls and they're calling me,” Ramsey said. “I don't have any answers right now.”

Standard homeowners' and commercial property insurance policies don't cover earthquake damage. Ramsey estimated that fewer than 1 percent of Oklahoma homeowners carry earthquake insurance, which must be purchased as an endorsement to homeowners' coverage or as a separate policy.

Less than $7 million in direct premiums are collected annually in Oklahoma for earthquake insurance, the state Insurance Department said. The largest providers of such coverage are Travelers Group; American International Group; State Farm; Zurich and Liberty Mutual, the agency said.

The coverage is not offered by all property and casualty insurance companies, largely because large earthquakes occur so seldomly in Oklahoma, said Jerry Johns, president of Texas-based Southwestern Insurance Information Services.

Damage estimates from the recent earthquakes were not immediately available, insurance officials said.

Johns said he expected numerous Oklahoma property owners will inquire about earthquake coverage, but few likely will buy it.

In California, where earthquakes are much more frequent (and premiums are considerably higher), only about 12 percent of homeowners have earthquake coverage, according to the Insurance Information Institute.

by Don Mecoy
Business Editor
Business Editor Don Mecoy has covered business news for more than a decade after earlier working on The Oklahoman's city, state and metro news desks, including a stint as city editor. He has won state and regional journalism awards for business,...
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