Today, many Oklahomans are finding that the insurance company that is supposed to cover them in the event of an earthquake now refuses to honor the insurance policy because the cause of the earthquake could be “human-induced” or the damage is due to a “pre-existing condition.”
If you or a loved one has had your earthquake claim denied, our attorneys can help. You obtained earthquake insurance—and paid the policy each month—precisely so that, if an earthquake did cause damage to your property, you would be covered. Our attorneys focus on Oklahoma bad faith insurance decisions and obtaining justice for our clients who have a right to expect that their contracts are honored.
More Earthquakes, More Earthquake Insurance
In the central United States—in places like Oklahoma—earthquakes are on the rise. In 2014 alone, there were close to 700 earthquakes of a magnitude of three or higher. Earthquake insurance policies typically cover damage caused by the shaking and cracking that destroys buildings and possessions associated with natural earthquakes. While typically not purchased by many Americans, increased earthquake activity in the central states has caused the purchase rate to increase from two percent in 2011 to 15 percent in 2014 in Oklahoma alone. This is even higher than the take-up rate in California, which was historically notorious for earthquake activity.
“Natural” Vs. “Human-Induced”
Recently, questions have arisen concerning the connection between earthquakes and activities such as fracking and petroleum extraction methods. This impacts consumers who purchase earthquake insurance, as standard property insurance policies typically exclude coverage for damage caused by earthquakes, and most earthquake insurance policies only cover “natural” earthquakes. Many companies then determine that property damage isn’t covered if it’s due to an earthquake that was likely brought about from fracking.
The issue here is that, regardless of what caused an earthquake, its effects on consumers—and their property and possessions—are all the same. Thus, when earthquake insurance coverage excludes damage caused by human-induced earthquakes, Oklahoma consumers often find their claims being denied. This has led to several state insurance regulators looking into whether activities such as fracking are responsible for some of the recent earthquake activity, as insurance companies are in the business to make money, and it is in their best interest to find a reason to deny claims.
Oklahoma Insurers Taking Advantage
The statistics in Oklahoma are dire: In 2014, only eight out of 100 earthquake claims submitted to insurers were actually paid. In fact, it has become such an issue here that, in March 2015, the Oklahoma Insurance Department issued a notice to insurers in the state notifying them that there is no agreement at the scientific level concerning any connection between fracking or injection wells and earthquakes. The notice also stated that there were concerns that insurers were potentially denying earthquake claims based on insufficient evidence in this regard.
The issue isn’t limited to outright insurance denials: Claim delays also became such an issue that, in October of that same year, the Oklahoma Insurance Commissioner ordered insurers to clarify whether policies cover earthquake damages specifically caused by gas and oil wells within 45 days. Legislators in Oklahoma are now considering passing legislation that is modeled on the California Earthquake Authority in order to protect Oklahoma citizens.
Beware Red Flags
Outright denials and delays unfortunately aren’t the only earthquake insurance issues springing up in the state of Oklahoma: Many citizens have been told that the insurance companies “don’t cover settlement” because it is excluded under the policy. Yet, some of the insurance companies are failing to inspect homes before issuing policies, then claiming that damage is due to settlement instead of earthquake damage. According to the Oklahoma Insurance Department, any company that issues you a policy without first inspecting your property should raise red flags.
This was also addressed by the insurance commissioner last year in the notice; specifically, insurers were informed that if they intend to deny claims due to “pre-existing damage,” he expects the insurer to have inspected the property before issuing the policy.
Experienced Attorneys Addressing Insurance Claims Denials
If you purchased earthquake insurance and your claim has been denied, there is room to negotiate. Insurers in Oklahoma know that they have been put on notice and need to behave responsibly when it comes to honoring earthquake insurance policies.
Schedule a free consultation with one of our bad faith insurance policy attorneys today to discuss your case. We are here to serve clients in Oklahoma City and surrounding areas, (405) 272-0303.