Oklahoma Commissioner to Insurers: Clarify Earthquake Coverage

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In response to questions from consumers about earthquake coverage, Oklahoma Insurance Commissioner John Doak is requiring property insurers in the state to issue a clarifying notice of earthquake coverage.

In announcing the new requirement, Doak said it’s known that “most people don’t read their policies. Even if they do, the language can be tough to understand.”

He said he issued the bulletin to insurers “so that, hopefully, Oklahoma consumers get a better idea of exactly what kind of coverage they have for earthquakes.”

Historically, earthquake insurance has excluded earth movement resulting from human activities such as mining, explosives, and oil and gas exploration. The Oklahoma Geological Survey has determined that the majority of the quakes experienced in Oklahoma are likely the result of wastewater injection into disposal wells.

Companies writing earthquake insurance in Oklahoma have reacted in various ways. Some amended their policy forms to cover damage resulting from wastewater injection. Others have been waiving the man-made exclusion and some still exclude quakes induced by wastewater injection.

Insurers have been instructed to issue a notice to policyholders and licensed insurance agents that includes the following:

Earthquakes Resulting From Oil and Gas Activities

Subject to all policy provisions, the coverage provided by this policy (IS) or (IS NOT) intended to cover earthquake damage resulting from:

extracting oil or gas from below the earth’s surface by any process, including but not limited to hydraulic fracturing or drilling; or
injecting or inserting any substance, including but not limited to, water and wastewater, below the earth’s surface for any purpose; or
storage of any substance, including but not limited to, water and wastewater below the earth’s surface for any purpose; or
any combination of a. — c. above.

About 15 percent of Oklahomans now have earthquake insurance.

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