Insurance Companies Respond To OK Earthquakes; Premium Hikes, Higher Deducts, No Coverage
As the number of earthquakes in Oklahoma exploded into the hundreds in the last few years, nearly a dozen insurance companies moved to limit their exposure, often at the expense of homeowners, a Reuters examination has found.
Nearly 3,000 pages of documents from the Oklahoma Insurance Commission reviewed by Reuters show that insurers and the reinsurers who cover them grew increasingly concerned about exposure to earthquake risks because of heightened frequency of seismic activity, which scientists link to disposal of saltwater that is a byproduct of oil and gas production.
Even as they insured more and more properties against earthquakes in the past two years, six insurers hiked premiums by as much as 260 percent and three increased deductibles. Three companies stopped writing new earthquake insurance altogether, state regulatory filings obtained by Reuters show. Several insurers took more than one of those steps.
In addition, the insurers would consider suing oil and gas companies for reimbursement in instances where they would have to pay damages to homeowners, according to several sources, including two insurance company officials. So far Oklahoma's biggest earthquake was a 5.6 magnitude temblor in Prague in 2011 that buckled road pavement and damaged dozens of homes. However, the push to limit earthquake exposure reflects insurers' fear that the surge in small quakes is a portent of a 'big one' in coming years, given the relationship between the magnitude and a total number of earthquakes in a certain area.
EDIT
http://www.reuters.com/article/us-usa-oklahoma-earthquakes-idUSKCN0Y30DC
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I can't wait!!
