The median payout on earthquake insurance claims in Oklahoma since 2010 is $3,960, according to a Tulsa World analysis of government data.
Companies paid out $5.1 million on claims statewide from 2010 through 2016. They have collected $211 million in coverage premiums from consumers.
Of 1,800 damage claims filed, 292 have received payments. That is an approval rate of about 3 in 20 claims. Denied claims total 1,337 (about 3 in 4 claims), and another 171 remain open (about 1 in 10).
About 269,000 earthquake policies are on the books in Oklahoma.
State insurance officials note that earthquake policies are written to protect against catastrophic losses, not minor damage, which they say accounts for the claim payout and approval figures.
The data are being collected on an ongoing basis by the Oklahoma Insurance Department as part of an industrywide survey. The Insurance Department provided the latest data — current through 2016 — to the Tulsa World at the newspaper’s request.
Oklahoma experienced three of its five strongest earthquakes in 2016, including the state-record 5.8 near Pawnee in September. There also was a 5.1 near Fairview in February and a 5.0 near Cushing in November.
In the immediate aftermath of the Pawnee quake, 423 claims were filed. Of those, 296 were denied, 52 received payments and 75 remain open. The payouts total $253,100.
After the Cushing quake, policy holders filed 108 claims, of which 30 have been denied, eight have been paid and 70 are still open. The payouts total $90,300.
The Fairview earthquake yielded five claims, each of which was denied.
The most expensive quake in Oklahoma remains the magnitude-5.7 near Prague in 2011. Policy holders filed 338 claims, with 118 paid and 220 denied. The payouts totaled $1,669,100.
The World’s analysis of the individual quakes took into account not only the date of each temblor but also the ensuing two days.
Studies still place Oklahoma firmly at risk for damage from earthquakes despite a depressed energy market and stricter oil and gas industry regulations that have significantly reduced wastewater disposal volumes, which have been linked to induced seismicity.
Oklahoma Insurance Commissioner John Doak in June declared the quake insurance market to be “noncompetitive,” meaning rate increase requests must be submitted to the Insurance Department for approval or denial. Doak holds the option of challenging a rate change he deems inappropriate.
He encourages consumers with quake-related questions to contact their insurance agents or call his department’s consumer assistance hotline at 1-800-522-0071. He has an earthquake policy on his own property and cautions those who don’t that they are self-insuring 100 percent of any temblor-related losses.
He previously discussed touring uninsured structures with significant damage after the Prague sequence in 2011.
“And I suspect some of those folks filed bankruptcy and walked away from their homes,” Doak said.
Insurers often impose a moratorium on purchasing earthquake insurance after a strong earthquake to separate one quake from another. Kelly Dexter, assistant commissioner of communications for the Insurance Department, said she is unaware of any current moratoriums.
Many companies pause the sale of policies for no more than 60 days within a 100-mile radius of the epicenter of a 5.0 or higher quake, according to the Insurance Department. Oklahoma hasn’t recorded a quake above 4.0 since November.
There were 623 quakes of magnitude-3.0 or greater in Oklahoma in 2016, a 31 percent reduction from 2015’s record of 903.
The U.S. Geological Survey on Wednesday released its one-year earthquake hazard forecast, determining that about 3 million people in Oklahoma and southern Kansas live in an area with “significant potential” for a damaging quake induced by human activity.
The study places the Cushing-to-Pawnee area as being in the greatest risk in Oklahoma, assessing a 10 percent to 12 percent chance of a damaging quake this year.
The forecast comes three months after Stanford University research found that the chance of exceeding a magnitude-5.0 in Oklahoma in 2017 is 37 percent. The study noted that the probability “should significantly decrease” with cutbacks in wastewater injection volumes, but one of the study’s co-authors told the Tulsa World the state still is “almost certain” to have at least one damaging quake in the next five years.