What The Frack? Should North Texans Secure Earthquake Coverage if They Live Near Hydraulic Fracturing Sites?

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Azle News Front Page


Photo: WFAA

As Azle residents stormed a meeting of the Texas Railroad Commission yesterday demanding a moratorium on wastewater injection wells used in hydraulic fracturing (AKA fracking), commissioners gave no indication of halting the practice that homeowners blame for the recent spate of earthquakes in their small Tarrant County town. Here’s a quote from Nicholas Sakelaris’ coverage of the hearing:

Many called for the oil and gas companies to be held accountable for the earthquake damages at their homes.

“Contractors don’t build our homes to withstand earthquakes,” one speaker said.

Another speaker said, “We don’t know if there’s any damage to the actual slab on our foundation because we have carpet. But I’m sure there probably is. Who would have ever thought we would need earthquake insurance?”

It’s frustrating for homeowners, who say that the earthquakes have rattled the town for months, causing damage to foundations, leaving cracks in drywall, creating sinkholes, spooking livestock, and disturbing what is often a peaceful and sleepy suburb near Eagle Mountain Lake.

While the commission decided to bring in a seismologist to study the earthquakes that clock in around a 3 on the Richter scale, there is little else they plan to do, leaving Azle residents to wonder how they can protect themselves against the damage these quakes are causing.

Oil Drilling Misgivings


Photo: AP

According to an article on insurance underwriter website Property Casualty 360, many insurers have been scared away from offering coverage for properties near fracking wells.

One of the most overlooked facts about fracking is that the process has been used in commercial applications since 1949. Over more than six decades, the U.S. has led the way in developing technology to stabilize and streamline the fracking process.

Yet, of the leading insurance companies, only a select few have begun underwriting oil- and gas-drilling-related risks. This slow adoption has led to a shortage of capacity in the oil- and gas-drilling insurance market, strangling investors’ appetites for risk and artificially slowing the rate of growth.

Why aren’t more insurers offering coverage for fracking risks? There’s a range of reasons, but what most insurers do not understand is that fracking is no different than other highly specialized, highly technical industries. Insurers have the opportunity to provide risk management and safety techniques that will help ensure the implementation of best practices and ultimately control claims costs.

If you’re depending on your homeowners policy to take care of your home following an earthquake, think again. Earthquakes, much like floods, aren’t covered. However, because earthquakes tend to be rare in Texas, coverage for earthquake-related damage is a relatively inexpensive add-on to most homeowners policies according to the Texas Department of Insurance. It has yet to be seen, though, if coverage rates in areas near fracking sites such as Azle will be more expensive.

Have you considered buying earthquake coverage for your North Texas home?


Joanna England

If Executive Editor Joanna England could house hunt forever, she absolutely would. Instead she covers the North Texas housing market and the economy for CandysDirt.com. While she started out with the Real Estate Center at Texas A&M University, Joanna's work has appeared in The Dallas Morning News as well as several local media outlets. When she's not knitting or hooping, or enjoying White Rock Lake, she's behind the lens of her camera. She lives in East Dallas with her husband, son, and their furry and feathered menagerie.

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