May 26, 2018

Earthquake Insurance Booming in Oklahoma

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Earthquake Insurance Booming in Oklahoma

The recent string of earthquakes in Oklahoma has sparked a boom in earthquake insurance in the Sooner State. Many are blaming the increase in tremors in the state on fracking, a rise in oil and gas drilling activity.

Read our natural disaster feature from the March/April 2014 issue of REALTOR® Magazine.

To date, Oklahoma has had about 200 earthquakes of a magnitude 3.0 or stronger this year alone. In November, a magnitude 5.6 earthquake – the largest ever recorded in the state – was blamed for destroying 14 homes. Standard home owner insurance policies don’t usually cover damage caused by earthquakes.

“Every time there’s a decent-size earthquake, there’s a spike in interest,” Matthew Ramirez, an agent for Farmer’s Insurance in Edmond, Okla., told Time Magazine. He says after the November earthquake, they were receiving about 20 calls per day for two weeks from home owners inquiring about earthquake insurance. Ramirez told Time that in 2011 only about 1 percent of the homes he insured had earthquake insurance. Today, more than 40 percent of them do.

Some seismologists correlate the rise in fracking in the state with the increase in earthquakes.

“It’s known that fracking can cause earthquakes and has caused earthquakes,” asserts Amberlee Darold, a seismologist with the Oklahoma Geological Survey.

While the American Petroleum Institute does not dispute that fracking can contribute to small-scale seismic activity, it rejects the notion that fracking is causing earthquakes sizable enough to damage a home.

Source: “Earthquake Insurance Becomes Boom Industry in Oklahoma,” Time (June 17, 2014)