Insurance Commissioner Doak releases “Oklahoma Earthquake Facts”
Published: November 8th, 2011
Oklahoma Commissioner of Insurance John Doak released the following summary of information earthquake-related issues, including insurance.
• The Oklahoma Insurance Department has developed a Web page at with information on earthquake preparedness and response, including links to other products including the National Association of Insurance Commissioners’ “Consumer’s Guide to Earthquake Insurance.”
• Any Oklahoma consumer with questions about earthquake insurance (or any other insurance-related matter) can call the Oklahoma Insurance Department Consumer Hotline toll-free at (800) 522-0071.
• Until local and state officials, insurance companies and adjusters have had an opportunity to receive and review all reports of earthquake damage it is difficult to know how many structures were damaged or what the total monetary loss to these earthquakes will be in Oklahoma.
• Earthquake insurance is not a popular product in Oklahoma. Dan Ramsey, president and CEO of the Independent Insurance Agents of Oklahoma, estimates that less than 1 percent of Oklahoma homeowners carry earthquake insurance.
• Only about $6.74 million in direct premiums are written annually for earthquake insurance in Oklahoma. The state’s top five carriers for residential earthquake insurance are:
• Travelers Group
• American International Group
• State Farm Group
• Zurich Insurance Group
• Liberty Mutual Insurance Group
• Earthquake insurance typically must be purchased apart from a standard homeowners policy, either as an “endorsement” added to the policy by the company that carries the purchaser’s homeowners insurance, or as a separate policy from a company specializing in earthquake coverage. Consumers will also have to wait a period of time – usually 30 to 60 days – after the most recently reported earthquakes in their area before they can purchase new earthquake insurance, due to the likelihood of aftershocks.
• The cost of an earthquake policy varies depending on factors, including the carrier and the policyholder’s desired level of coverage, but typically an Oklahoma homeowner might expect to pay between $100 and $150 per year for earthquake insurance.
• Earthquake policies frequently have nuances, such as providing or not providing coverage for brick or stone veneers on the home.
• Earthquake insurance carries a separate and often substantial deductible, apart from the standard homeowners deductible. Often this deductible is calculated as a percentage of the insured property’s value – commonly 5 to 10 percent, but occasionally lower or higher – meaning that a $100,000 home would require a deductible of $5,000 to $10,000.
• In 2003, the United States Geological Survey ranked Oklahoma tied with Indiana at No. 18 for earthquake frequency from 1974-2003. During those 30 years, both Illinois and Oklahoma reported 17 tremors of a magnitude 3.5 or greater on the Richter Scale. (While California has a reputation for earthquakes, it was only No. 2 on the USGS list during that time with 4,895 reported tremors of 3.5 or greater; Alaska was No. 1 with 12,053 earthquakes, or 57.2 percent of all quakes reported in the U.S.)
• Quakes are on the rise in Oklahoma. As of this writing current USGS data suggest that Oklahoma has experienced more than two dozen quakes of a magnitude 2.7 or greater since early Saturday morning with nine of those reaching 3.5 or greater on the Richter Scale and another 14 registering between 3.0 and 3.4. More than 80 earthquakes of all magnitudes have been reported across the state in the last 30 days.
• In April, one of Commissioner Doak’s “Commissioner’s Corner” columns published in local newspapers around the state addressed the topic in a piece titled “Shaken But Not Broke: The Value of Earthquake Insurance.”
On Oct. 28, after a series of minor tremors were reported in the state, Commissioner Doak issued a Consumer Advisory entitled “Recent Tremors Should Prompt Policy Review,” again urging Oklahoma consumers and insurance agents to explore available options for protecting their property and possessions from earthquakes.
Commissioner Doak said: “In Oklahoma, we’ve been getting clues for some time now that a damaging event could be in our future. There is no time like the present to consider that future, and the policyholder’s potential need for earthquake coverage.”