I was in my first earthquake over the Labor Day weekend. For the past few years, Sheri’s family has rented a cabin in Davis, Oklahoma for Labor Day weekend. It’s a great time to get away, be together, cook for each other, and watch too much football. I slept through the 5.8 magnitude earthquake which was felt in north Texas all the way north to Illinois. It didn’t cause too much damage to our Oklahoma neighbors, but it provides a great backdrop to revisit home insurance and earthquake coverage.
No home insurance policy includes coverage for damage to your home caused by an earthquake. It’s either covered as a separate earthquake policy, or some carriers offer it as an option which can be added to their home policy. For those carriers who offer this option, it may include earthquake coverage for damage to the home, contents & loss of use. These may be packaged together or offered as separate options.
Not all home insurance carriers offer earthquake coverage as an option to their home policy. In these cases, standalone earthquake policies are available to provide coverage that compliments your home policy.
The three components of an earthquake policy or optional coverage may have include property, contents or personal property, and loss of use. Property coverage is strictly designed to repair or rebuild the home when damage occurs from measurable seismic activity including an earthquake and aftershocks. A claim will only be paid if there is measurable seismic activity.
Contents coverage protects personal property including furniture, appliances, electronic equipment, etc. that is damaged from measurable seismic activity. Loss of use coverage is designed to protect the family financially if they need to rent a place to live while their home is being repaired or rebuilt.
Most studies have determined the quakes in Texas and Oklahoma are not caused by fracking, but rather injecting the wastewater from fracking into injection wells. The wastewater is injected at very deep levels and appears to set off tremors when injected near fault lines. The Oklahoma Corporation Commission and the EPA shut down 54 injection wells until the danger of further quakes passed. This raises the issue of what to do with that wastewater when drilling resumes.
Not everyone needs earthquake coverage, whether through a standalone policy or as an option on their home insurance policy. I do believe, however, homeowners in areas near injection wells should evaluate it. What do you think? Share your comments, questions, and experiences with me on my Facebook, Google +, and LinkedIn pages. I’d love to hear from you!