Oklahoma is pretty much a disaster.
At least, that’s how it seems to the insurance industry. Oklahoma has had 52 natural disasters since 2000, the most in the U.S., according to insurer Recoop. And that doesn’t count any of the man-made earthquakes that have rocked the state since 2009.
And that’s why property insurance premiums in Oklahoma are among the highest – some say THE the highest – in the country.
Rep. Rep. Mark Tedford, R-Tulsa, is in the insurance business himself. He can’t do anything about the wind, hail and ice that are the main cause of these rising premiums, but he has some other ideas.
Tedford is carrying several bills this session aimed at helping property owners with insurance bills that have tripled in the past decade or less.
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One would make state grants available to property owners who upgrade existing structures to better withstand severe weather. Another would limit insurers’ ability to cancel policies or raise premiums due to claims, particularly those related to weather damage.
“There is nothing an individual can do about wind activity,” Tedford said.
He said he is “not very big” on measures such as premium caps, which critics say could end up distorting the market and driving out private insurers. But he thinks Oklahoma homeowner premiums can be brought under control without resorting to some of the measures seen in states like Florida and California, where state-owned or overseen separate risk management pools fill coverage gaps.
HB 3089, the Strengthening Oklahoma Homes Act, providing $10 million in grants “to retrofit insurable property … to withstand loss due to a tornado or other catastrophic wind or hail storm event” “.
HB 3090, which allows for the creation of holding companies for mutual insurers, is expected to facilitate capital formation and expand capacity.
HB 3092, prohibiting insurers from canceling policies for a single claim more than five years after issuance or denying an application because of a previous claim more than 5 years old.
It also prohibits insurers, in most circumstances, from canceling, refusing to renew, suspending or increasing premiums based on an insured’s claim history for weather-related events, unless there have been three or more such claims within the previous three years.
So how expensive is Oklahoma homeowners insurance? Insurance.com says that’s about twice the national average and just ahead of No. 2 Kansas. Insurance broker Policygenius reports average rate increases of 14% and 27% in the last two years for which totals are available. And that doesn’t include last summer’s Father’s Day storm that hit Tulsa with winds of 100 mph or more.
State-by-state comparisons are a bit difficult because of variations in coverage. Insurance.com says Hawaii has the nation’s lowest rates, but that doesn’t include hurricane coverage, which must be purchased separately. In large sections of California, fire coverage is available only through the state, and most earthquake insurance is sold through a quasi-governmental broker.
Florida is considering expanding the scope of its high-risk pool because of the difficulty and expense of insuring certain areas.
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