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Insurance companies given deadline to clarify earthquake coverage

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OKLAHOMA -- Oklahoma's insurance commissioner is now ordering insurance companies to clarify their policies.

Insurers have been given 45 days to let their customers know whether their policies cover earthquake damage that is specifically caused by oil and gas wells.

It's clarification that Stillwater residents, like Angela Spotts, says is long overdue.

The area has seen an increased number of earthquakes.

“We've had damage like hot water tanks. I've got walls splitting. The problem is the damage continues to get worse. The Cushing quakes have been the hardest on my home,” she said.

She fears there's no end in sight.

“When the pieces of the wall start to separate, its like, why am I going to be responsible for it,” she said.

Spotts has earthquake insurance, but it's only for catastrophic loss. To make repairs to her home, she'll have to front the cost, which is thousands of dollars.

“We were told to buy insurance. Many of our homes were already damaged, so how is that going to impact us? My deductible is $10,000,” she said.

It's a problem many in the area are facing with increased earthquake activity. Now, the insurance commission is requiring companies to provide clarity to homeowners like Angela.

“Mainly because people don't know what they are purchasing, what's covered. They don't know how to read those contracts,” said Buddy Combs.

Combs is the Policy Director for the Oklahoma Insurance Commission.

“If you have an earthquake policy out there now, you are going to get something from your insurance company that says you are or are not covered for an oil and gas-induced earthquake. We want to make sure consumers know what they bought, and that if they have one of these earthquakes, they are going to be covered,” said Combs.

It's information Spotts says is necessary. But she says the bigger problem is still not being addressed.

“I think there needs to be an independent investigation. I think [the] industry needs to be held accountable. The governor should come out on the side of the people."

The insurance commission says some companies have changed policies to cover damage from wastewater injection, while others have waived the man-made exclusion. Others still exclude quakes caused by wastewater injection altogether. So you'll want to read that policy information carefully.