The Dakota Access pipeline is not likely to impact homeowner’s insurance, said Kerry Klepfer, vice president of sales at KSB Insurance in Keokuk. “If you have a crude oil pipeline on your property, the insurance companies do not have a problem with that," Klepfer said. Gerald and Tammy Brewer, homeowners in Lee County, were told differently when they spoke with their insurance agent about how a pipeline running through their property would impact their homeowner's policy.
“She [the agent] said, 'I'm sorry, but if this goes through your property, we'll drop you,'” Gerald Brewer said. “They won't provide insurance for our home anymore,” added Tammy Brewer.
Klepfer said the Brewer’s agent had that reaction because they used the word “hazardous” when describing the crude oil pipeline.
“Whenever you use the "H-word, hazardous" and call an insurance underwriter and say 'I have a hazardous situation,' they're going to say, 'we don't want anything to do with it. We're done,'" said Klepfer.
The Brewers weren’t using the “H-word” to be dramatic. They were quoting Iowa law, 479B.2, which names at least eight materials including crude oil as "hazardous liquids."
But Klepfer said the insurance companies he works with don’t ask questions regarding hazardous material pipelines on their homeowner's insurance applications. So, for the time being, it’s not a problem.
However, Klepfer said those insurance companies don't provide coverage for any damage caused by pollution, such as crude oil seeping out from a pipeline. Klepfer said they also don’t provide liability coverage if a neighbor was to sue a property owner for having pollution overflowing onto their land.
Current homeowner’s policies do provide protection if the crude oil pipeline were to explode. But, that could change if an explosion were to actually happen.
“Insurance companies are always really good about, we had a house explode because of a pipeline, now we don't want to have anything to do with pipelines,” Klepfer said.
Another concern the Brewers and other residents have raised is whether the pipeline will impact the value of their property. Steven Derr, senior vice president and senior lending officer at KSB Bank in Keokuk, says that’s an unfounded fear.
"In general, we don't see any price differential or change in resale value for property with underground pipelines running through them," Derr said.
Derr said he has heard of people who don’t want to live near a railroad track, highway, or pipeline carrying oil or gas along it. But he said that personal preference is unlikely to impact the overall value of a property.