Insurance & you: A love hate relationship.

As part of preparedness month I thought I would start off with something that should be first on the list for owners and renters alike--insurance. I know insurance can be convoluted and the legalese is enough to make your head spin, but this is your first and oftentimes best line of defense to ensure (get it?) that you're protected when something happens.

http://wainassoc.com/2013/01/10/right-insurance-agent-could-save-you-thousands/

Before going further you need to click the link above and read the story, you'll be outraged but know situations like the one Mr. Crea faced happen more often than you think...

Ok, so now I need you set aside the anger you're feeling and know that you can avoid ending up in a similar situation by following some simple steps:

Review your policy. Don't have one? Well this is a great time to do some research on the types of events your community is prone to and to talk to an insurance agent. If you already have a policy, read it through, how much coverage do you have? What's covered, what isn't? Confused by something? Call your agent--be a pain, but don't stop until you understand what you're paying for. Insurance should give you piece of mind, not keep you up at night because you're unsure of what's covered and what isn't.

Resources to help get you started:

• floodsmart.gov (lots of useful and easy to understand info)
• http://www.investopedia.com/articles/pf/08/homeowner-insurance.asp (a beginner's guide)
• [insert your insurance agent's phone number here]

Ok, so you're feeling good, you understand your policy, you and your insurance agent your buddies, so what do you do when something happens? 

Contact your insurance company as soon as possible. Because you've kept all of your important documents in a secure place, referring to them will be a breeze when talking to your agent, a claims adjuster, or whomever is taking down your information. They are going to ask you questions about the damage, the losses, etc... you can help this process along by...

Compiling a list of everything that's been damaged. A good idea is to keep a disposable camera in your preparedness kit so that you can catalogue the damage to your personal property for insurance purposes, the ideal is to capture everything on video if possible. The urge to start cleaning up will be great, but resist; don't begin cleaning until everything has been captured on film and you have an inventory of the damaged items, and most importantly an adjuster has gone over it with you. This will ensure that you get as much as possible in the long run. However, if you have questions about whether you need to wait for an adjuster before beginning cleanup, ask your insurance company. 

Make sure your adjuster can contact you. There is a lot of uncertainty following an event, if you have to make a temporary move, make sure your insurance company knows how to get a hold of you.

Have broken windows? Is your roof leaking? Make any temporary repairs that will prevent further damage to your home, and keep the receipts. Now is not the time for permanent repairs, you just want to keep further damage from taking place. You need to wait for your insurance to weigh in on what's covered and what's not before permanent repairs can begin.

Which brings me to the most important step: Breathe. This is not going to be a quick process, be prepared to spend a lot of time on the phone and revert to step 1. The more you know about your policy, the better you can be at advocating on your behalf...knowledge is power.

Optional Step

If you feel like you didn't get a fair shake by your insurance company, you have the option of hiring a public adjuster, but beware they come with fees and whole set of issues that may impact just how much money you have to repair / rebuild when all is said and done. If you're interested in learning more, this provides a good overview. 

So the dust has finally settled and you have your check in hand, Let the permanent repairs begin! Can you see that glimmer? That's light my friend...but before you go hiring the first contractor that offers you their services, remember fraud sucks (while not a step, it's important to reinforce that). Follow these tips for finding a reputable contractor and make sure you sign a contract that works for you and not just your contractor.

So there you go...a little primer on insurance and disasters. Please do not use this as an authoritative guide to the steps you should follow...this is designed to get you thinking about the subject and I encourage you to read up on what policy works best for you. 

Man Made Earthquakes

Slipping from the vein of "natural" disasters, the USGS has recently released a study that confirms that Hydraulic Fracturing or "Fracking" wastewater stored in wells can cause traditionally stable faults to slip causing earthquakes.

While the debate of ethics vs economics is waged, the stats that the USGS cites are tough to ignore:

"The number of earthquakes has increased dramatically over the past few years within the central and eastern United States. More than 300 earthquakes above a magnitude 3.0 occurred in the three years from 2010-2012, compared with an average rate of 21 events per year observed from 1967-2000." 

Mother Jones also has an article and a .gif that illustrates the process from well to earthquake:

Drillers inject high-pressure fluids into a hydraulic fracturing well, making slight fissures in the shale that release natural gas. The wastewater that flows back up with the gas is then transported to disposal wells, where it is injected deep into porous rock. Scientists now believe that the pressure and lubrication of that wastewater can cause faults to slip and unleash an earthquake.

Illustration: Leanne Kroll. Animation: Brett Brownell

So what?
While 3.0M quakes rarely, if ever cause damage or injury, the quakes resulting from this method of storing wastewater have been linked to tremors in the 5-6.0M range. From a codes and building perspective, the Midwest is still grappling with how best to offer affordable safe room options in building back smarter that earthquakes and the codes to withstand moderate shaking are not on their radar. As such, the damage from smaller magnitude quakes will continue to impact homeowners because their the exception, not the rule in Tornado Alley. 

House damage in central Oklahoma from the magnitude 5.6 earthquake on Nov. 6, 2011. Research conducted by USGS geophysicist Elizabeth Cochran and her university-based colleagues suggests that this earthquake was induced by injection into deep disposal wells in the Wilzetta North field. Learn more about that research at: http://geology.gsapubs.org/content/early/2013/03/26/G34045.1.abstract. Photo Credit: Brian Sherrod, USGS.

While there are preparations underway to respond to a catastrophic quake similar to the New Madrid Earthquakes of 1811 that caused the Mississippi River to backflow for a period of time, nothing is being done now to protect against smaller, more frequent shaking.

Who's going to Pay for all this?
After a disaster: flood, hurricane, fire, hail or wind storm, the battle between homeowner and insurance company begins. The combination of under-informed homeowner's who don't fully understand their insurance policies and the insurer's who aren't interested in paying out every claim can be a tension-filled dance taking weeks to resolve. Given that coverage for quake damage probably isn't in most of the home and business owner policies, the impacts of these events are going to become a growing concern. Couple this with the fact that there is evidence that these quakes are precipitated by activities undertaken by private companies and the questions like: who should be responsible for paying to cover the damages begin to be asked?

I don't see this being a problem until someone is crushed by a collapsing chimney or there are serious injuries resulting from a man-made quake and then questions about liability and financial compensation will push this to the forefront of the national conversation given how much money the Natural Gas Industry is currently making.