Filed Under:Markets, Personal Lines

Nationwide Fracking Dust-Up Should Be Non-Story

NU Online News Service, July 16, 2:44 p.m. EDT

A story last week that Nationwide would not cover claims from fracking has created some confusion and should never have been a story in the first place, says Robert Hartwig, president of the Insurance Information Institute.

Hartwig says that the widely circulated story, that Nationwide Insurance is the first carrier to say it would not cover claims from fracking, led to some confusion among reporters covering the energy industry, forcing the carrier to clarify what has been a longstanding policy among insurers.

Last week, a memo, attributed to Nationwide, was posted on several New York environmental websites opposed to expansion of fracking mining into the state.

Fracking is the injection of high-pressure water into underground shale for the purpose of releasing oil and gas trapped in the rock.

The practice is blamed for contaminating ground water and causing shifts in the earth creating earthquakes in some areas.

In its statement explaining the memo, Nationwide says that gas and oil drilling has been going on for years and fracking is just another variation of that business.

The company says it has not changed its policies or guidelines in regard to the business, adding that it has never covered losses related to the gas and oil drilling.

Hartwig says ground-water contamination is not covered because of pollution exclusions in a homeowners policy.

As far as damage to the home from shifting earth, homeowners' and commercial property policies do not cover difference in condition.

Christine Barlow, associate editor of FC&S Online, a division of Summit Business Media, which also owns National Underwriter and PC360, agrees that pollution coverage is typically excluded under property policies.

As far as damage from ground movement, anyone with earthquake insurance would have coverage since the policy does not define what causes the earthquake, only the movement of ground by the shifting of tectonic plates. Any movement other than earthquake is excluded, Barlow says.

Hartwig says that if the fracking does cause damage, the property owner’s recourse is to sue the company doing the work. “That’s why they have liability insurance.”

Featured Video

Most Recent Videos

Video Library ››

Top Story

The Rising: PIA President Richie Clements' personal & professional resurrection, post-Katrina

PIA's national president reflects on the moment he became a “real” insurance agent, his agency's rebirth, and the challenges still faced by his beloved city 10 years after Hurricane Katrina.

Top Story

6 lessons insurers learned from Katrina

Ten years later, Katrina is still making an impression. Numerous lessons were learned from Katrina that have helped insurers and other first responders better prepare for other catastrophes. Some may seem obvious, but others demonstrate just how much has changed in the past decade.

More Resources

Comments

eNewsletter Sign Up

Personal Lines Pro eNewsletter

Critical insights into the personal auto, homeowners, and other consumer insurance markets to help P&C professionals stay informed – FREE! Sign Up Now!

Mobile Phone

Advertisement. Closing in 15 seconds.