Earthquakes in Texas and Home Insurance

Thirteen earthquakes struck north Texas in a 24 hour period last week hitting near the former site of Texas stadium in Irving. North Texans began asking, “Where were you when the quakes struck?” The top three quakes measured 3.1, 3.5, and 3.6 on the Richter scale, with the remaining tremors measuring between 1.6 and 2.9. Many north Texans were shaken up. Calls began to pour in to city offices, fire and police departments, as well as offices of homeowners’ insurance agents.

One of the questions I was asked, is what’s causing these quakes? No one really knows what’s causing the earthquakes. Some speculate it’s seismic. There are two fault lines that run through north Texas; the Balcones and Ouachita. Some wonder if it’s related to the implosion of Texas Stadium, and others wonder if it’s related to fracking or injection wells for fracking waste.

SMU’s research team, which has been studying quakes near Azle, Texas, installed a third quake detector in Irving to pinpoint the quakes locations. Irving and Dallas are contemplating creating a joint task force to investigate the quakes, and even the Texas Railroad Commission, which oversees oil and gas drilling, have hired a full-time seismologist. The Commission’s seismologist will review the recent data and compare it injection well locations to determine whether injecting waste into these wells caused the most recent spate of tremors.

Regardless of what the studies determine, no standard Texas home insurance policy covers earthquake damage to your home. There are some policies where earthquake coverage can be endorsed, or added as an option. The cost to add this coverage ranges from $100 to $500 a year, depending on the home’s insurance or dwelling value. If you’re insured with one of these companies, and live in the mid cities area, I’d encourage you to add this coverage. Minor damage can be caused to homes and other structures in a quake measuring 4.0 to 5.4 magnitude.

Most Texas home insurance policies don’t offer optional earthquake coverage. In these cases, optional coverage can be purchased with a separate earthquake policy. These policies are similar to flood policies in that coverage can be purchased for the home only or the home and its contents. Cost for these policies can be expensive. One broker I work with has a minimum annual premium of $2,500. I’m discussing coverage with my other brokers to see if there are more cost effective options. If not, we’ll discuss whether or not our clients who want this coverage would be interested in moving to one of our carriers who offers the optional coverage.

There are two things to consider when evaluating earthquake coverage; policy coverage and the deductible. In some cases, optional coverage may or may not include brick veneer. In the cases where it doesn’t, this means the earthquake coverage addresses structural damage but excludes damage to the home’s brick veneer. Other’s cover the entire structure including the brick veneer.

Most Texas home insurance deductibles are 1% for wind and hail damage, as well as other perils. Earthquake coverage typically carries a 5% deductible. This means it’s really important for any homeowner to increase their savings to cover any damage their home would sustain from a series of tremors.

What I’d like to see is all Texas home insurance companies add optional earthquake coverage. It’s more affordable coverage for homeowners, and the risk of Texans experiencing a sizable earthquake which causes widespread structural damage is minimal. The largest recorded earthquake in Texas occurred in Valentine on August 16, 1931 with a magnitude of 6.0. What would you like to see? Share your comments, suggestions, and questions with me on our Google +, Facebook, and LinkedIn pages. I’d love to hear from you!

Evie Wise
Evie Wise


Evie Wise
Evie Wise

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