The Uncertainty of the Earthquake Insurance Market

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The earthquake market has moved onto unstable grounds as insurers and alternative capital investors demand higher returns on their capital. Over the past 20 years, the earthquake insurance market has narrowed down significantly, with many insurers leaving the market entirely, while others refuse to issue new policies in certain high-risk areas.  Even among those still willing to sell coverage, stricter underwriting standards make some types of dwellings ineligible for coverage. Those who can obtain coverage find they are required to “self-insure” to a much greater extent than in the past. Rate increases have intensified over the last year, with deductibles up to 20 percent of the dwelling value being more common than not. Buyers should expect higher prices this year for the same coverage.

In an uncertain market, its not a matter of if, but when the next big earthquake hits. Being proactive is key to obtaining the best results and getting an early start on renewals is crucial. Buyers who can provide better and more detailed information on their risks can expect a higher chance of acceptance from underwriters. Make sure you have a knowledgeable broker that has broad access to markets across the industry, so they can obtain a broader range of quotes and help insureds find the coverage that meets their goals.

If you have any questions or are looking for quotes on earthquake insurance, please contact us and we will be happy to serve you.