Fracking and Home insurance

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28 February 2014 at 23:21

– What does the insurance-company think about fracking?

– Do they consider it as a risk?

– Do they accept to insure your house if you are living in a fracking-area?

– Does fracking lower the value of your home and property?

– If your area get fracked, what about your insurance?

PS: I have put “Fracking” in the title, but I should maybe have used another word, for example  “unconventional gas”.

I propose that YOU verify with your insurance-company! Would you have to pay more or would they refuse to insure you if fracking or extraction of unconventional gas starts in your area? Would they say something like this “we don’t know” and than tell you that you can insure your house and property, but if you have a damage in some way or another, your case would have to be studied! Iy means you can get an insurance, but you won’t know until after any damage, if you’ll get a payout or not!!!!

Would you take the risk?????

And what about the value of you house and property. I do NOT think the value would increase!!!!

Why not leave a comment on what you discovered?

Insurance shock for Wells home owners

WELLS home owners might receive a shock when they come to insure their homes in the future.

Alan Hudson, 56, of Priory Place, has been refused home insurance by two different companies because he was in a potential fracking area.

Mr Hudson said: “My NatWest policy was up for renewal so I thought I would email a variety of companies asking about insuring my home against fracking.

“I explained that I needed a standard home and contents policy which will also cover me for any damage incurred by fracking.

“I was shocked when both Legal and General, which is a huge company, and Hiscox both said they could not insure me for damage caused by fracking – Legal and General wouldn’t insure my house at all.”

(Click on link below to read the rest)

Homeowners – fracking damage is now an “excluded peril” from buildings insurance policies

“… Further to my post a few days ago regarding property insurance and potential damage caused by fracking, I have some further news. My brokers have made enquiries of nearly300 insurance companies, either by telephoning them directly, or via email. The vast majority are treating this as an ‘Excluded Peril’ and are not prepared to cover the risk under any circumstances, even if the risk was shared by the policyholder by increasing the voluntary excess. However, they have found one company, Royal, Sun Alliance, who are prepared to underwrite the risk. However, in order to facilitate this, they have increased my premium by 19.4%. ..”

(Click on link below to read the rest)

Further update on property insurance and potential damage caused by fracking

California fracking: Property owners who cannot get insurance or loans

A not-so-new fracking nightmare has been exposed. A new curse has arrived to torment home and property owners who allow fracking on their properties. The curse even extends to those who live near fracking operations. Insurance companies refuse insurance and lenders turn down property loans when fracking is involved with a property.

(Click on link below to read the rest)

Fracked Nation

Nationwide Statement Regarding Concerns About Hydraulic Fracturing – July 13, 2012

From an underwriting standpoint, we do not have a comfort level with the unique risks associated with the fracking process to provide coverage at a reasonable price. Insurance is a contract and it is designed to cover certain risks. Risks like natural gas and oil drilling are not part of our contracts, and this is common across the industry. Our longstanding underwriting guideline is that we do not insure the oil and gas business.

(Click on link below to read the rest)

Nationwide Insurance: Fracking Damage Won’t Be Covered

ALBANY, N.Y. (AP) — Nationwide Mutual Insurance Co. has become the first major insurance company to say it won’t cover damage related to a gas drilling process that blasts chemical-laden water deep into the ground.

(Click on link below to read the rest)

Should homeowners freak out over fracking?

In some parts of the country, methane levels high enough to set water on fire are raising serious concerns for homeowners about the dangers and insurance consequences of hydraulic fracturing, commonly known as “fracking.”

In fracking , natural gas drillers force sand, dozens of chemicals (some toxic) and water into shale to fracture and release the gas. This process occurs about 5,000 to 8,000 feet below the surface. Hot spots for this procedure include Louisiana, Pennsylvania and Texas.

(Click on link below to read the rest)

Other links:

TimesOnline Insurers: Fracking-related damages not covered by standard policies

Fracking Insurance: Winners and Losers

No fracking insurance: how long until no pipeline insurance?

The Fuss Over Fracking: An Examination of the Insurance Issues Associated with Hydro-Fracking

A Nelson Levine de Luca & Hamilton White Paper, August 2013.

Insurers already refusing to insure homes in areas designated for fracking

Got Fracking Insurance ?

Fracking Insurance

The Fuss Over Fracking: (Added 1 Mars 2014)

An Examination of the Insurance Issues Associated with Hydro-Fracking, a white paper published by the law firm Nelson Levine de Luca & Hamilton (see graphic above), provides an in-depth examination of the insurance and liability issues related to hydraulic fracking, to aid insurers in assessing the potential risks.




How fracking lowers the value of property and real estate

 According to a study performed in 2001 in Colorado, properties located near fracking areas were prone to loss of value. They were around 18% cheaper than those found further away from oil wells. In fact, the greater the distance between real estate and an oil well, the higher the price. It shows that folks don’t want or need to live in an area full of noise and pollution.

Mortgage Problems from Fracking – A Gas Lease Can Prevent You From Selling Your Property

Most homeowners did not know about the dangers of hydrofracking when they signed a gas lease and are only now finding out that most home mortgage loans prohibit the types of heavy industrial activity and hazardous materials that come with fracking.

Take the case of Brian Smith of Daisytown, PA  who in May 2012 was unable to refinance his home and was told by his lender, “While Quicken Loans makes every effort to help its clients reach their homeownership goals, like every lender, we are ultimately bound by very specific underwriting guidelines. In some cases conditions exist, such as gas wells and other structures in nearby lots that can significantly degrade a property’s value. In these cases, we are unable to extend financing due to the unknown future marketability of the property.” New research indicates that the vast majority of prospective buyers say they would decline to buy a home near oil and gas drilling.

(Click on link below to read the rest)

Fracking the American Dream: Drilling Decreases Property Value – November 13, 2013

Drilling conflicts are almost always described in the context of their impacts on air,water and health. But increasingly, as the drilling boom sweeps the country, another part of the drilling story is starting to bubble up in drilling hotspots like Colorado, Pennsylvania, New York, Wyoming and Texas.

Increasingly, oil and gas development is butting up against, and often trampling, the bedrock American principles of property rights and the value of one’s home. The map below shows all the shale gas in play in North America.

(Click on link below to read the rest. It contains links to many other articles!)

Property Value

Water Source a Deciding Factor in Property Value

A Duke University and Resources for the Future study found that the most significant factor in the impact of oil and gas development near residential property is whether water is piped in or sourced on-site from a well.

Based in Washington County, PA, the study found that property with on-site wells lost 13 percent of their value.

(Click on link below to read the rest)


Flower Mound Well Site Impact Study

A 2010 study of the Texas real estate market  in the heavily drilled suburban-Dallas area near Flower Mound concluded that homes valued at more than $250,000 and within 1,000 feet of a drilling pad or well site saw values decrease by three to 14 percent.

(Click on link below to read the rest)


Faced with a boom in coal-bed methane development in the early 2000s, officials in La Plata County, CO studied the impacts of oil and gas development  and found that properties with a well drilled on them saw their value decrease by 22 percent.

(Click on link below to read the rest)

Fracking and property values (Added 1 Mars 2014)

As reported in this Ecowatch article, in 2012 Duke University and Resources for the Future published Shale Gas Development and Property Values: Differences Across Drinking Water Sources, a National Bureau of Economic Research (NBER) working paper on the effects of unconventional gas drilling on property values in Washington County, Pennsylvania. The study found that in isolation, the risk of groundwater pollution could negatively affect property values by as much as 24 percent, enough to fully offset any gains from lease payments or an increase in local economic activity. This potential for a decline in the value of a property was found to be higher if the property used groundwater rather than a public water supply.

(on same page…)


Fracking and mortgages (Added 1 Mars 2014)

“How the Fracking Boom Could Lead to a Housing Bust” (The Atlantic, August 2013) reports on the housing market in areas such as Bradford County, Pennsylvania, where 93% of land is under lease to gas companies. A couple of prospective buyers in Washington County, Pennsylvania was recently refused a mortgage because the property they intended to purchase was across the street from a gas installation.

“Rush to Drill for Natural Gas Creates Conflicts With Mortgages” (NYT, Oct. 2011), part of the Drilling Down series of articles, reported that major US mortgage lenders Fannie Mae and Freddie Mac prohibit mortgage holders from signing gas leases without the prior consent of the lender. The article contains links to many documents obtained

by the New York Times, such as this one, which outlines the Fannie Mae/Freddie Mac position.

(on same page…)


Fracking and insurance (Added 1 Mars 2014)

A resident of St. Anne’s, in the Fylde district of Lancashire, England, recently reported on the trouble he was having finding a home insurance provider willing to cover the risks associated with hydraulic fracturing, which is proposed for his area. Here is an excerpt:

“My brokers have made enquiries of nearly 300 insurance companies, either by telephoning them directly, or via email. The vast majority are treating this as an ‘Excluded Peril’ and are not prepared to cover the risk under any circumstances, even if the risk was shared by the policyholder by increasing the voluntary excess. However, they have found one company, Royal, Sun Alliance, who are prepared to underwrite the risk. However, in order to facilitate this, they have increased my premium by 19.4%.”

(Click on link below to read the rest)—september-15-2013

Other links:

Gas Drilling Jitters Unsettle Catskills Sales


Duke Chronicle Duke researchers show dip in home value caused by nearby fracking  


Tompkins Trust Company Gas and Oil Leases Impact on Residential Lending


The New York Times Rush to Drill for Natural Gas Creates Conflicts With Mortgages


The Colorado Statesman Drilling and fracking have destroyed value of our most significant investment — our homes


WTAE ABC 4 News Couple denied mortgage because of gas drilling


Grist Fracking boom could lead to housing bust


Reuters U.S. drilling boom leaves some homeowners in a big hole , Dec 12, 2013–finance.html


PS: If any of you have other articles you would like to add, please contact me or leave a comment!!!









Created 28 February 2014 by Alerte Schiste