Home insurance premiums can rise due to nearby fracking

California earthquake insurance sales skyrocketed last year

Thousands of homeowners across Yorkshire are concerned as the operations prepare to begin.

Many residents in areas surrounding upcoming fracking sites are concerned about rising homeowners insurance premiums. This is the case in a number of regions around Yorkshire where the operations may soon begin.

Industry experts have cautioned homeowners in those areas that they should expect to pay more.

The Yorkshire Post reported that experts in home insurance premiums believe fracking may affect the amount people pay. That said, precisely how the insurance rates will be affected has yet to be seen. The fracking industry remains quite new in the United Kingdom . Therefore, insurers – and their customers – will need to wait before they know just what the impact will be.

The Department for Business, Energy & Industrial Strategy recently issued a letter to residents near affected areas. People living close to the Rotherham planned shale gas exploration project were among those in receipt. “The Association of British Insurers have confirmed that ‘any potential damage as a result of fracking, such as earthquakes, subsidence, heave and landslip are all covered in general, under buildings insurance’. In addition to insurance cover, landowners could bring a claim against the company if their activities caused damage to their property,” explained the letter.

The potential for increased home insurance premiums is the result of the government’s energy strategy.

The British Government is boosting its efforts to find new ways to decrease its reliance on imported energy. This is a particular focus as the deal – if any – that will be in place post-Brexit remains unknown.

Fracking is a process that involves using a chemical and water mix under high pressure. It is sent underground to release the shale gas stored in the rocks there. That process was stopped in the United Kingdom in 2011. That said, the country’s need for home-produced fuel sources has returned the method to the table.

The U.K. halted its fracking operations after Lancashire test drilling operations were found to have been causing earthquakes. Now, seven companies have been issued exploration licenses to determine whether or not Yorkshire offers feasible fracking opportunities. Should this move ahead, thousands of properties will be affected and home insurance premiums are expected to spike.

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