OKLAHOMA - In the last few years, Oklahoma has been shaking more than ever, making earthquake insurance a hot topic among homeowners.
The Oklahoma State Insurance Department said, since 2010, nearly 1,100 claims have been filed relating to earthquake damage.
However, only 208 of those have been paid.
The largest claim made, so far, involved a home with damage totaling more than $1 million.
However, that appears to be rare.
In fact, the majority of claims paid out, so far, have been for less than $5,000.
The commissioner is looking now at how those policies are issued, trying to see if a change is necessary.
In recent years, many Oklahomans have been signing up for the protection from earthquakes.
Now, the insurance commissioner said it's time to look at protecting those consumers from outrageous rate hikes.
“We want to make sure these policies that are being presented to Oklahomans are going to be effective, cost efficient,” said Oklahoma Insurance Commissioner John Doak.
Right now, companies can raise their rates and, then, within 30 days, notify the commissioner of the change.
They're looking at changing the system, requiring companies to file the rates first and, then, get the commissioner’s approval before the new rates go into effect.
The potential change is focused on protecting consumers.
State Rep. Richard Morrissette said it’s a change that should have come a long time ago.
“It's like the tail wagging the dog here,” Morrissette said. “This should have been done a long time ago.”
The commissioner said the idea would be to make the market more friendly to consumers.
“This is not to inhibit the free market we have in Oklahoma, but it’s an opportunity to stand in the gaps for consumers and help them be more educated on what's happening with earthquake rates in Oklahoma,” Doak said.
“We believe that the best way to encourage and keep insurance companies in the earthquake marketplace is to allow them to price their products as the marketplace dictates. Requiring government approval of rates does not entice insurers to invest more capital into a marketplace. We believe any regulation akin to prior approval could be a disincentive to expanding earthquake insurance offerings on Oklahoma. We remain ready to work with the Commissioner on an ongoing basis to help address these concerns,” said Paul Martin with The National Association of Mutual Insurance Companies.
The change is being considered.
The commissioner said he will make a final decision sometime within the next 30 days on what is best for consumers and the industry.