The Association of British Insurers (ABI) said the industry is monitoring fracking exploration and data around any related disturbances but stressed that there is currently very little evidence to suggest the method of oil and gas extraction poses an increased risk.
Stephen Sobey of the ABI said the body had discussed the impact of fracking with ministers and government officials. “Unless it is specifically requested by an insurer, homeowners do not currently need to disclose their proximity to fracking sites. However, if it is requested by an insurer, then this does need to be disclosed.
“There is, at present, little evidence to show a link between fracking and seismic activity that could cause damage to a well-maintained property, however, insurers will continue to monitor the potential for fracking, or similar explorations, to cause damage,” he said.
The ABI is working closely with insurers as the energy industry begins to explore sites across the country. Any ground disturbances could spell trouble for home-owners, as subsidence reports are taken into account when insurers price policies.
Russell Byrne, pricing and underwriting director at Legal and General said all policy holders are currently covered for damage due to earthquake, subsidence, heave and landslip and that he could not see any exclusions which would invalidate a policy if the damage was caused by fracking.
He added: “We are waiting to find out more and we’re working with the ABI closely.”
A spokesman for Aviva also confirmed it was working with the industry body and added: “Currently fracking is not an issue for home insurers and we are comfortable that there is a robust approval process before any fracking can take place.”