OKLAHOMA CITY- At today’s public hearing exploring issues of competitiveness and pricing in the earthquake insurance market, the Property casualty Insurers Association of America (PCI) expressed sympathy for Oklahoma consumers who are now under a regular barrage of earthquakes and reassured regulators that insurers are actively engaged in meeting consumers’ needs with a variety of earthquake policies and prices.
Over the past few years there has been a rapid rise in the number of earthquakes in Oklahoma. While not part of the standard homeowners’ insurance policy, earthquake insurance is widely available for consumers who would like to purchase it.
“Earthquake insurance is designed to cover catastrophic losses and fortunately the vast majority of earthquakes in Oklahoma have been small and rarely strong enough to cause significant property damage or the loss of life,” said Joe Woods, vice president of state government relations for PCI. “However, insurers would be irresponsible not to take all of these small earthquakes as possible precursors to a major event in the future.”
Based on the Modified Mercalli Intensity Scale (MMI), used by the U.S. Geological Survey to measure the intensity of earthquakes, in the past 5 years, two exceeded magnitude 5.0, which the MMI indicates would do slight to moderate damage to well-built ordinary structures.
“While catastrophic damage has rarely occurred, we encourage consumers to seriously consider purchasing this additional coverage,” said Woods. “Insurers are offering earthquake coverage in Oklahoma and consumers should shop around for the policy that best suits their needs.”
Sadly, similar to California only 10 percent of property owners purchase earthquake coverage. “While we recognize cost is a factor in the purchasing decision for consumers, in order to make the coverage available insurers must charge rates that reflect expected losses. With scientific evidence indicating a large earthquake could hit Oklahoma insurers need to be ready,” said Woods.
To learn more about earthquake coverage visit PCI Earthquake Headquarters.