The main perils that reportedly may be affected, include:<\/p>\n
- \n
- Earthquake, movement and tremors<\/li>\n
- Pollution and Contamination<\/li>\n
- Impact, Riots and Vandalism<\/li>\n<\/ul>\n
Earthquake, Movement and Tremors<\/strong><\/p>\n
The majority of household insurers will provide cover for damage caused by earthquake, movement and tremors. I have not experienced any policies that will specifically exclude these perils if caused by fracking\u2026 yet.<\/p>\n
This is the most talked about scenario in household insurance in relation to fracking and the one that would likely cause a shift in the industry. Claims of this nature would involve a long monitoring period, followed by a legal process aimed at proving negligence on the side of the fracking operator. The process would be long, complex and costly. If this became a genuine risk to insurers, it would be likely that they would take this into consideration when applying conditions, calculating pricing or choosing whether to offer terms at all.<\/p>\n
In summary, it is likely existing cover will apply, but if insurers do end up paying claims, homeowners in fracking areas can expect an increase in premiums and\/or access to a restricted market place.\u00a0<\/strong><\/p>\n
Pollution and Contamination<\/strong><\/p>\n
This is probably the hottest topic surrounding fracking in the public eye and unfortunately, it is very unlikely it will be covered by your household insurance.<\/p>\n
Pollution tends to be a restricted or excluded peril in most policies and if your water supply were affected, it would more likely be an issue to discuss with your water provider. If your own private water source were affected, then it is likely that legal proceedings would be the most appropriate route for you to take. Some policies offer legal protection but this is ordinarily based on the provider having a likely chance of winning the case \u2013 a \u2018prospect of success\u2019 clause.<\/p>\n
Impact, Riots and Vandalism<\/strong><\/p>\n
The process of fracking normally brings a spotlight to quiet rural areas and with this, comes disruption. This is caused by the arrival of heavy machinery and increased traffic caused by the fracking companies, which is often followed by protesters opposed to the fracking practice. We have not experienced any claims related to impact, riot or vandalism yet. However, there does lie an increased risk. Fortunately, most household contracts will provide cover for this, on the premise they are made aware as soon as the incident occurs.<\/p>\n
To conclude, it is still to early to say how fracking will really affect people\u2019s home insurance policies but the above should offer some areas for you to consider if you live near a potential fracking site.<\/p>\n
If you are concerned by the impact of fracking in your area and specifically, whether you are covered in the event of an incident, please do get in touch to discuss \u2013 we would be more than happy to help.<\/p>\n
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