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The problem is that earthquake insurance is so expensive and so high-deductible that a risk analysis only concludes it's worth getting if you live in an especia
by raldi 13y ago
The problem is that earthquake insurance is so expensive and so high-deductible that a risk analysis only concludes it's worth getting if you live in an especially risky neighborhood, or have an especially at-risk house.
So only the riskiest buildings get it.
So the average customer of the insurer skews ever closer towards the extremely at-risk end of the spectrum.
So the insurance companies have to raise the rates and deductibles.
And then you go back to step one, and the vicious cycle gets even more extreme.
- thaumasiotes 13y ago> So only the riskiest buildings get it. > So the average customer of the insurer skews ever closer towards the extremely at-risk end of the spectrum. > So the insurance companies have to raise the rates and deductibles. This chain of "logic" only makes any sense if you assume that the insurance companies have to offer all their customers the same rates and deductibles. If the building owners can figure out that they're facing an elevated risk, why can't the insurance companies?
- raldi 13y agoThey're mandated by California law to insure anyone who wants it.
- thaumasiotes 13y agoThat doesn't address anything I said. My parent comment already presupposed that they're able to change their rates. Are they really required to insure anyone who wants it, all on exactly the same terms? If so, maybe the problem isn't that earthquake insurance is just a natural death spiral?
- raldi 13y ago> all on exactly the same terms It's not that simple, but it is that heavily-regulated: http://law.onecle.com/california/insurance/10089.html http://law.onecle.com/california/insurance/10089.html