The Woodward News

June 7, 2013

Insurance officials address how storms are affecting policies

Rachael Van Horn
Woodward News

Woodward, Okla. — As much as we all may want it to be, the storm season is not over.

This year's significant and even record breaking storms have many nervous about their safety and also the current status of their home and vehicle insurance.

That couldn't have been more obvious to Julie Dome, owner of Lake Insurance Dome Agency of Laverne recently, while during a recent storm warning, customers called her concerned about their lack of insurance.

"Some had realized they forgot to get insurance," Dome said.

That's a problem. Because while most people may not know it, Dome said agents cannot legally write a policy during a storm watch or warning.

But that is just one small fact about home and vehicle insurance, an industry that seems to exist in the public more through rumor and coffee shop chatter than real updated knowledge.

So, while Oklahomans might be hearing recent rumors about insurance companies deciding to "leave" the state, the reality is a little less daunting, according to the Oklahoma Insurance Department (OID)

So far this year, no insurance companies have officially issued a statement that they plan to stop writing policies in Oklahoma, OID officials said.

The rumor might have been fueled by 2 insurance companies, GHS Property and Casualty Co. and Homeowners of America Insurance Co., who made public their plans last year, to stop writing policies in the state  "due to the staggering effect of multiple natural disasters," according to a story published on last year.

"Customarily insurance companies have to look at several factors and determine how they can continue to do business," OID spokesman Kelly Collins said. "They plan several years out and try to plan for disasters like what we have had."

But despite several recent massive disasters, no insurance companies have signaled their intent to stop writing policies here. It is requirement to notify the Oklahoma Insurance Department if a company plans to pull out of the state.

"Last year, we did have those 2 that discontinued coverage here, but then we got 2 more companies," Collins said. "That is how it is, we may lose one, then we gain one back."

But while homeowners can relax a bit about fears of insurance companies leaving, Collins said they should plan on an increase in the cost of a policy. But oddly, not entirely because of the recent storms.

"Insurance companies plan way ahead for those rate increases because they have to submit them to us ahead of time," Collins said. "But that does not mean they won't take into consideration the effects of these events."

Now, more than ever, Dome suggests people sit down and really read their policies and become familiar with what those policies actually cover so there are no surprises.

"Every couple of years they need to reevaluate their policy," she said. "Some people build additions to their homes and don't even think about adding coverage."

Dome also clarified what most policies typically cover, saying:

1. Most policies cover contents at a rate of up to 50 percent of the home's value. That means, if you have insured your home for $100,000, the policy will cover up to $50,000 in content damage, depending on the level of damage. If a homeowner wants more content coverage, they will have to pay for it.

2. Normal homeowner policies do not cover flood damage. Flood insurance is a federal policy that it has to be asked for separately.

3. To be covered in the case of an earthquake, home owner policies must have a special endorsement.

Dome suggests that homeowners insure their homes for the replacement value of their home not for its current value.

She is cautious about flood insurance.

"If you live in a flood prone area, then of course, you should get flood insurance. Out here? Well, who knows," she said. "Those people in Oklahoma City whose homes had damage from that flood, would not be covered on a regular home owner policy without a flood insurance policy."