Earthquake authority proposes new law to make insurance coverage more affordable

Earthquake InsuranceThe East Coast was rattled by an unexpected and rare earthquake this week. The seismic event sowed worry amongst a populace that has never experience such a thing before. The manner in which residents of the East Coast reacted to the quake drew criticisms from Californians, most of whom are accustomed to such events. Despite earthquakes being common in the state, the California Earthquake Authority is taking this opportunity to spread awareness of earthquake insurance.

Given the frequency of earthquakes on the West Coast, one would think that earthquake insurance is abundant. While many insurance companies offer such policies, few homeowners have necessary coverage. The prevalence of this insurance diminishes in eastern states. It is not because people are not aware that there is, in fact, insurance that covers earthquakes that they do not have these policies. It is because they cannot afford such coverage.

Earthquakes have the potential to cause a massive amount of damage. This risk drives up the price of the coverage as insurance companies seek to protect themselves financially in case of a disastrous event. The massive expense of earthquake insurance has led the California Earthquake Authority to propose new legislation named the Earthquake Insurance Affordability Act.

The legislation seeks to lower the cost of earthquake insurance throughout the nation. The act would also make cuts to California’s reinsurance holdings, allowing for more than $100 million in saving a year, which will translate into a 20% reduction in earthquake insurance.

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