Authors: Lucija Muehlenbachs, Elisheba Spiller, Andrew Steck and Christopher Timminsy - February 15, 2015
Homeowners, be aware! That fine print in your homeowner’s insurance policy could really matter if hydraulic fracturing damages your home sweet home. Fracking-related damage, insurance industry insiders say, is not covered under a standard homeowner’s insurance policy. Neither is damage caused by floods, earthquakes or earth movement, which insurers call exclusions.
In this paper we review the phenomena of hydro ‘‘fracking’’ operations for oil and gas in the United States. We provide background information on fracking, a summary of federal and state fracking disclosure and management regulations, and an evaluation of the potential surface and subsurface effects.
Using property value data from New York and Pennsylvania to look at the impacts of proximity to a shale gas well on home values, experts find that the effects differ depending on whether homes have access to piped water versus well groundwater. (Published in the American Economic Review)