Homeowners Insurance in Oklahoma

Oklahoma homeowners, we have both good and bad news for you. The good news is that your state has some of the most affordable property values in the country. The bad news is that it’s in the higher part of the top 10 most expensive states for homeowners insurance premiums.

A variety of factors – severe weather especially – contribute to the elevated rates for homeowners insurance rates in Oklahoma. In this guide, we’ll mostly be talking about the most popular homeowners insurance policy, the HO-3 special form policy (read our “Understanding Homeowners Insurance Forms” for more information. There are cheaper plans, but they don’t provide nearly as much coverage as the HO-3, and the perils those policies protect against are much more limited than what the HO-3 protects against.

Although the average home value in the state is around $180,000, our methodology gathered data on estimated annual premiums for a $250,000 home. The HO-3 special form provides coverage for your dwelling, your personal property, liability coverage, and medical payments. Like most other forms of insurance, your deductible can be raised in exchange for a lower annual premium.

Because homeowners insurance rates are so high in Oklahoma, it can really pay to shop around. You’re still going to be paying some fairly hefty sums, but getting multiple quotes from different insurance providers can give you a fair shot at obtaining the most affordable premium available in your area.

Laws and Requirements

In accordance with the small government fervor of this red state, there are no local or federal laws which mandate you to purchase a home insurance policy. Unfortunately, that personal freedom goes out the window if you are paying for your home with a mortgage loan from your local bank. Regardless, it’s a good idea to have insurance on your home whether you own it outright or not; otherwise you’ll be left 100% responsible for fixing any property damage the next time a twister rolls through.

Taking a Home Inventory

Do you know how much your personal property is worth? Your electronics, you major appliances, jewelry, artwork…etc.? Well, you’re going to need to know in order to purchase the right amount of coverage for your property (your “Part C” coverage on an HO-3 policy). Overestimating your property value leads to purchasing excess coverage, which means your premiums will be higher for no good reason. But underestimating your property’s value is also dangerous. You might not buy enough coverage in that situation, which means you’ll have a larger financial responsibility if you need to file a claim.

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Choosing What (and How Much) Coverage

The basic HO-3 policy that many Oklahoma home insurance companies offer does not necessarily cover every potential disaster that your home or your property may face. Before you sign the paperwork on your policy, make sure to talk to your insurance agent about:

• Wind/Hail – damage from wind and hail, which are unfortunately common occurrences in the state, are thoroughly covered on your typical HO-3 homeowners insurance policy. This includes both your external structure and your personal property. But make sure and talk to your agent about any special deductibles which may apply to claims filed for wind and/or hail damage.
• Tornadoes – There’s a reason the cinematic blockbuster “Twister” was filmed in the sooner state. Oklahoma has some of the most destructive severe weather in all of Tornado Alley. Your insurance policy should cover any tornado-related damages thanks to its wind peril coverage, but you might need to check with your agent to make sure.
• Earthquakes – certain fossil fuel extraction methods have made parts of Oklahoma, especially in the eastern half, more geologically active than they’ve been in human history. Unfortunately, earthquakes are not typically covered by private homeowners insurance. Ask your agent for information on riders or endorsements that can protect your home from expenses related to earthquake damage.
• Floods and Water Damage – you don’t hear much about floods in Oklahoma, but flash floods can be a real problem at certain times of the year. And most home insurance policies have very little coverage for any sort of water damage. To protect yourself, you may want to consider flood insurance from the National Flood Insurance program (read our “flood insurance for homeowners” for more information). They have affordable coverage that most private insurance companies aren’t willing to offer.
• Covering Your Property – The biggest difference between Part A coverage (your domicile) and Part C coverage (your property) is the difference between open peril coverage and named perils coverage. It’s important to discuss these two different forms of coverage so that you understand where and how you’re covered, and what additional coverage options you may need to purchase.
• Liability Coverage – Accidents can happen almost anytime. But if they happen on your property, and if you are found at fault, it can get expensive. Liability insurance on your homeowners policy helps protect you and pay out costs associated with lawsuits and medical bills.
• Umbrella Coverage – Are you doing pretty well for yourself? Are the dollar values of your home and its contents more than what your insurance provider can sell you? Then umbrella coverage may be your answer. Umbrella coverage is essential for someone who needs more coverage than the average resident. Some companies will offer coverage limits up into the millions if that’s what you need.

Replacement Cost vs. Actual Cash Value

Replacement cost coverage is handy in a disaster, but can cost more in annual premiums. Replacement cost is the option you can choose if you want your insurer to pay 100% of all costs to repair or replace the structure or the personal property inside your home – after you pay your deductible, that is.

Read more: Homeowners Insurance: Replacement Cost vs. Actual Cash Value

Actual cash value is a little different, but can save you money on your premiums if you choose it. Actual cash value incorporates depreciation into how much your insurance provider will pay out on an honored claim. Because this means you will share more of the financial responsibility when damage strikes your home, your insurance company will lessen your annual burden when it comes to your premiums.

How Your Credit Score May Influence Your Rate

CLUE reports are summations of the last seven years of your credit history, and only include certain types of credit (such as your track record with your auto insurance premium payments, for example). Accessing your CLUE report won’t harm your credit score the way a “hard” check would. This allows you to get as many quotes as you want, and still enjoy the lower premiums that come with having a high credit rating.

Learn More

For more information, feel free to click any of the links you see in this article. They all lead to more detailed information about homeowner’s insurance, specifics on purchasing a policy, and how to find the best deal. You should also contact local resources in your state, such as:

Oklahoma Insurance Department – Homeowners Insurance Rate Comparisons

The Official Oklahoma State Government Website

Market Assistance Program

Or contact them directly through the following resources:

Oklahoma Insurance Department
Five Corporate Plaza
3625 NW 56th, Suite 100
Oklahoma City, OK 73112-4511
Local: 405.521.2828
In State Toll Free Number: 800.522.0071
Fax: 405.521.6635