Whether man-made or from natural causes, earthquakes raise alarm and anxiety. For those who live in Oklahoma, the rumblings of earth are daily events. In fact, the frequency of human-induced earthquakes is on the rise, and a recent geological study warns that almost 3 million people will probably experience the effects of a human-induced earthquake of sizable magnitude in the near future.
After the tremors settle and you have confirmed the safety of loved ones, you probably turn your attention to your home. Even a minor earthquake can cause significant structural damage to a building, so you took the advice of someone you trusted and purchased earthquake insurance for your home. However, what does that insurance cover?
Earthquake coverage is probably not included in your homeowner insurance policy. It is typically a separate policy and usually expensive to maintain. You will probably pay an average deductible of 10 percent with premiums running between 30 cents and 71 cents for every $1,000 of coverage.
In the past five years, homeowners in Oklahoma have paid over $200 million in earthquake insurance premiums, but insurance companies have paid only $5.1 million in claims. An earthquake in 2016 resulted in policy holders filing 423 claims from which only 52 customers received payouts.
Insurance companies explain that their policies are not to cover minor damage to your home. They are to help with major repairs after a catastrophic event. The law requires insurance companies to send every policy holder a letter clearly explaining this and other stipulations in their policies. However, if a contractor has told you the damage to your home is significant, yet your insurance claim is denied, what are you to do about it?
Finding solid ground
The contractor who inspected your house may have a very different opinion from the insurance adjuster when it comes to the damage and the cost to repair it. The claims adjuster will likely try to minimize the damage to save his company money. Your insurance company may reject your claim altogether, despite the high premiums you have paid faithfully.
Discussing your dilemma with an attorney may provide you with answers and alternatives, especially if that attorney has a reputation for successfully representing clients against the bad faith tactics of insurance companies. Your attorney can work side by side with your contractor to achieve the most positive outcome possible in your situation.