INN Blog

More Posts
 

Discussing Quake Insurance In Okla.

By Jessica Miller, Enid News & Eagle, Okla.
McClatchy-Tribune Information Services

July 04--Oklahoma Insurance Department officials are making efforts to educate homeowners about earthquake insurance coverage, according to Insurance Commissioner John Doak.

The largest earthquake in Oklahoma history -- a 5.6 magnitude temblor -- struck Lincoln County in 2011.

"I did see that some folks had to walk away from their homes, and they left (them) to file bankruptcy because they had no insurance," Doak said. "I also saw a home in Lincoln County, that the epicenter of the earthquake was in the backyard, and they had just purchased an earthquake rider for less than $100 a year. (It) replaced their entire home. So, I've seen both sides.

"And for us at the insurance department, we really just want to make sure that we're doing our piece related to education, where consumers can make that choice -- because it is not required by your mortgage ... it's not mandatory coverage."

Doak said there is an Earthquake Insurance Guide on the department's website -- www.oid.ok.gov.

"The main thing that consumers need to know is that earthquake insurance is not covered under their current homeowners policy. Many of them, most of them, think that it is. It is not," he said. "So they need to be educated and talk to their licensed agent or broker to really find out if that's the coverage that they need. We're suggesting that they be educated."

According to Doak, earthquake coverage is an endorsement and has a percentage deductible, unlike flat deductibles on home or auto insurance policies.

Typically, earthquake insurance deductibles range from one to 10 percent of the total value of the home, he said.

"When you take a look at that, some folks in California say, 'I can't afford my deductible.' But, in Oklahoma, there's some innovative companies out there, you can buy that deductible down," Doak said. "If you have your home paid off or you have a mortgage or something on your home, I think that it's prudent for someone to just review their insurance and decide. If you don't have insurance, you're self-insuring. So, can you take that loss?"

Less than 10 percent of California homeowners carry earthquake coverage, he noted.

New Strategy to avoid RMDs

"We've had this recent activity here in the last year. I think the statistics are over 30 times more activity than we've had in recent history, which is a lot. We don't have, necessarily, the tall building exposure that California has. So our numbers have been historically less than one percent of Oklahomans carry earthquake coverage," Doak said.

There are more than 100 companies writing earthquake coverage in the state.

"Historically, it's been very, very cost effective," he said. "If you have a $100,000 home, it can be anywhere from $40 to $200 a year, it just kind of varies upon construction type, prior losses, history. But it is available in the state of Oklahoma."

Doak frequently receives questions about moratoriums.

He explained that moratoriums -- which give insurance companies a "pause button" to assess potential claims before writing new coverage -- vary by insurance company.

"You cannot buy earthquake insurance when your house is shaking, is what I'm saying. And some consumers don't know that. So we're trying to assist them there," Doak said.

___

(c)2014 the Enid News & Eagle (Enid, Okla.)

Visit the Enid News & Eagle (Enid, Okla.) at www.enidnews.com

Distributed by MCT Information Services

Wordcount: 559



USER COMMENTS:


  More Property & Casualty

More Property & Casualty >>
  Most Popular Property & Casualty

More Popular Property & Casualty >>
Hot Off the Wires  Hot off the Wires

More Hot News >>

insider icon Denotes premium content. Learn more about becoming an Insider here.
New Strategy to avoid RMDs