Earthquake Insurance Market Is NoncompetitivePosted June 5, 2016
Last week, Oklahoma Insurance Commissioner John Doak published findings revealing that the earthquake insurance market is noncompetitive in the state. As a result, residents are significantly limited in their ability to obtain affordable insurance. In an effort to protect homeowners, the commissioner recently issued an order directing Oklahoma insurance companies to file any rate increases with the Oklahoma Insurance Department before they are put into effect.
In recent years, increased oil and gas activity in the state has led to a higher number of earthquakes in Oklahoma. This has had a significant impact on homeowners, many of whom have suffered damage to their homes. Concerns were raised after the department received numerous complaints alleging that as the incidence of earthquakes increased, fewer and fewer insurance companies were offering earthquake policies. Additionally, evidence was presented revealing that those companies that were offering these types of policies had significantly increased their rates and deductibles in the last five years. In response, the commissioner scheduled an investigative hearing.
In his recent order, the commissioner stated that the results of the hearing indicated that Oklahomans are unfairly limited when attempting to purchase earthquake insurance. Furthermore, the commissioner found no objective criteria for recent rate increases. According to the findings, there are 119 companies that sell earthquake insurance in the state. However, for the last six years, as many as 55 percent of homes with earthquake insurance have been covered by only four major companies.
Currently, insurance companies are allowed to implement rate changes as long as those modifications are filed with the department within 30 days after the rates are applied. However, out of concern that companies are drastically increasing their premiums, the commissioner issued an order requiring property insurers to file any rate increase with the Oklahoma Insurance Department before the changes will be considered effective. If the department finds that a rate change is unsuitable or there is no valid basis for a rate increase, it has the authority to challenge it.
Contact Us For Help
An insurance company’s bad faith in increasing rates and failing to offer earthquake insurance can have devastating financial and personal consequences for homeowners and their families. If you were unable to acquire insurance due to an unfair market, it is important to contact an experienced attorney who can protect your interests. Please contact one of our dedicated bad faith insurance attorneys at the Bennett Law Firm at 405-272-0303 and we will help you schedule an initial consultation.