Penn.: Fracking Exclusion Not Allowed in Homeowners Earthquake Endorsements

April 15, 2015

The Pennsylvania Insurance Department issued a notice telling insurance companies that earthquake endorsements to homeowners insurance policies in Pennsylvania cannot exclude coverage for earthquakes that may be caused by “human activity” such as fracking.

According to the Pennsylvania Insurance Department’s notice issued on April 11, some insurers have asserted that because of an increase in natural gas extraction in Pennsylvania by means of a process commonly referred to as “fracking,” endorsements should exclude coverage on homeowners policies for earthquakes that are not “naturally occurring.”

But Pennsylvania’s Acting Insurance Commissioner Teresa D. Miller wrote in the notice that determining with certainty that human activity caused an earthquake is very difficult. Insurance claims by homeowners should not go unpaid during a long and arduous investigative process that will likely uncover no definitive proof linking the earthquake to human activity, Miller said.

“Insurers and rating organizations are therefore instructed that earthquake endorsements that attach to homeowners insurance policies in this Commonwealth should cover all earthquakes, whether believed to be ‘naturally occurring’ or caused by ‘human activity,'” the notice stated.

The notice stated that insurers with earthquake endorsements already in the marketplace which exclude coverage for earthquakes that are not naturally occurring should not enforce these exclusions, and that new endorsements without the exclusionary language should be filed with the Insurance Department by no later than July 1, 2015.


Topics Catastrophe Natural Disasters Pennsylvania Homeowners Earthquake

Was this article valuable?

Here are more articles you may enjoy.

Latest Comments

  • April 20, 2015 at 5:19 pm
    An Actuary says:
    Yep, if homeowners purchased coverage for earthquake damage, they should be compensated for earthquake damage. This seems like the correct move by the PA DoI. If insurers ar... read more
  • April 20, 2015 at 11:31 am
    Exadjuster says:
    There's always subrogation.
  • April 20, 2015 at 11:23 am
    boonedoggle says:
    If Homeowners risk damages are deemed resultant from fracking, then tort liability should flow, both first party and via insurance subrogation actions against the frackers res... read more

Add a CommentSee All Comments (6)Add a Comment

Your email address will not be published. Required fields are marked *


More News
More News Features