Because my expertise is mortgages not insurance, I have turned to some trusted professionals that we work with that are experts in homeowners' insurance.
Not all companies offer earthquake insurance. The least expensive coverage is available as an endorsement on your current policy. If your current provider does not offer this, you can get a stand alone policy from a different company but it will cost at least twice as much.
Estimates for premiums range from $40 to $150 for most Oklahoma homes. Cost is based on many factors such as deductible, amount of coverage, replacement cost coverage, etc. Brian Dudgeon of Farmers Insurance in Stillwater wrote a policy Monday "for a $300,000 home and the policy cost $81 for one year."
Although deductibles range from 2% to 10%, OKC Farmers agent Robert Chaplin says that the price difference is minimal, so 2% provides the best value.
Value, however, is what you should seek from your insurance dollar. Joshua Lakey of Brookside Market Insurance Agency, an Allstate agent in Tulsa, points out that you should review your entire market basket of insurance to evaluate if earthquake coverage is right for you. For example, a $200,000 home with a 2% deductible would need to sustain more than $4000 worth of quake damage before you would see benefit from this type of coverage.
Lastly, there is a waiting period. Joey Capps, a Farmers agent in OKC, says it depends on proximity to the epicenter. Each
company is different, but typically there is a 5-7 day waiting period if your
home is located within 40 miles of the epicenter. This waiting period resets if
there are aftershocks that measure 5.0 or greater on the Richter scale.
As with mortgages, everyone's needs and circumstances are different. If you have specific questions, contact your agent or one of the trusted professionals that contributed to this:
Oklahoma City - Joey Capps, Farmers Insurance, (405) 759-7100
Oklahoma City - Robert Chaplin, Farmers Insurance, (405) 751-9453
Stillwater - Brian Dudgeon, Farmers Insurance, (405) 707-9200
Tulsa - Joshua Lakey, Brookside Market Insurance Agency (Allstate), (918) 574-2400
Thanks also to my Fairway Mortgage colleagues in Oklahoma for their help compiling this information.
Oklahoma City - Jerry Ashford, (405) 517-4959
Oklahoma City - Jim Steward, (405) 821-1031
Stillwater - Pam Shipman, (405) 372-5363
Next, we will review how earthquakes affect mortgage underwriting.