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Extra insurance needed for man-made earthquakes?

By Bobby Hickman on May 2nd, 2012

Earthquake insurance can provide additional peace of mind for homeowners who face the constant threat of tremor-related damage. But what about man-made tremors resulting from fracking?

Typical insurance policies for homeowners, renters and businesses exclude coverage for structural damage caused by earthquakes. Policyholders can usually add an endorsement to their existing policy to cover earthquakes, or they may have to buy a separate policy. Rates and terms vary between companies and from state to state, so shopping around for the best deal is always important.

However, those policies may not cover man-made earth movement. Government scientists have reported an increasing number of tremors in the central part of the United States. At least one study has linked increased seismic activity to wastewater disposal from "fracking," a method for extracting natural gas and oil from the earth.

While earth movements linked to fracking have been minor and caused no damage, residents in areas near fracking sites have become concerned that future activity could trigger a damaging quake.

If you are concerned about possible earthquake damage, experts suggest:

  • Reviewing your current coverage. The vast majority of homeowners policies do not cover earthquake damage.
  • Obtaining quotes for earthquake insurance. You may be able to add a rider to your existing policy, or you may be able to purchase a separate policy from your carrier. If the carrier does not have coverage, shop around with another insurance company that does cover earthquakes.
  • Determining whether the policy will cover quakes resulting from fracking activity. The concept of human activity causing earthquakes is fairly new. Some policies specifically exclude non-natural earth movements from coverage. Ask your agent or broker whether fracking would be covered. And take notes on what you are told, in case there are disagreements in the future if you need to file a claim.

Only a small percentage of homeowners have earthquake coverage -- even in heavily affected states like California. Not everyone needs this protection. But if you are in an area where the possibility of a man-made earthquake is a possibility, it may be worth adding the coverage.

Bobby Hickman
Bobby L. Hickman is an Atlanta-based journalist who writes about insurance, economic development, mergers and acquisitions, and similar topics for a variety of publications. His work focuses on the financial services, travel/hospitality, software and filmmaking industries. A former newspaper reporter and editor, Bobby is also an author ghostwriter, blogger, copywriter and editor. In addition, he works as an IT consultant, providing technical and project management services to Fortune 500 companies. He is a member of the American Society of Journalists and Authors (ASJA) and the Atlanta Press Club.
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