Newspaper article THE JOURNAL RECORD

Oklahoma Policyholders Shake Up Market for Earthquake Insurance

Newspaper article THE JOURNAL RECORD

Oklahoma Policyholders Shake Up Market for Earthquake Insurance

Article excerpt

In the first nine years of Brian Dudgeon's career as an insurance agent, he sold perhaps one or two policies for earthquake coverage.

In the last few weeks, he and his partner at a Farmers Insurance office in Stillwater have sold 50 to 60.

"People are adding it to their policies," he said. "We're averaging 10-15 a week, and that's people coming to me; I'm not approaching them about it. They're selling like hotcakes."

Those hotcakes have been slipping around the skillet more than usual. U.S. Geological Survey data shows that from 1975 to 2008, central Oklahoma experienced three or fewer 3.0-magnitude earthquakes annually. From 2009 to 2013, activity rose to an annual average of 40. By the middle of February, the survey recorded more than 25 quakes of 3.0 magnitude and more than 150 of all sizes in a single week.

On Wednesday, the survey reported two small earthquakes in north- central Oklahoma. Residents reported hearing a boom and experiencing some shaking. The first quake was recorded at 1:30 p.m., with a preliminary magnitude of 3.4. The second was a preliminary 3.2 magnitude quake at about 1:45 p.m. Geologists say damage is not likely in earthquakes below magnitude 4.0.

Dudgeon offers policies with a 2-percent deductible, fairly low compared with others in the market. However, Dan Ramsey, spokesman for the Independent Insurance Agents of Oklahoma, pointed out that earthquake claims are based on the total value of the property. So the deductible on a $150,000 home is $3,000 at 2 percent, or $15,000 at the more common rate of 10 percent. Many policyholders, particularly big businesses, have found such figures to be too high after weighing against premiums and risk.

This year might change a lot of perspectives, Ramsey said.

"In our building, which is just 5 years old, we can see hairline cracks in the ceiling that we're certain were caused by earthquakes," he said. …

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