Earthquakes
Standard home, renters, and business policies exclude earthquake damage, so separate coverage is needed—often with percentage-based deductibles.
Insurance 101
FROM THE GLOSSARY
ADVERSE SELECTION
The tendency of those exposed to a higher risk to seek more insurance coverage than those at a lower risk. Insurers react either by charging higher premiums or not insuring at all, as in the case of floods. (Flood insurance is provided by the federal government but sold mostly through the private market.) In the case of natural disasters, such as earthquakes, adverse selection concentrates risk instead of spreading it. Insurance works best when risk is shared among large numbers of policyholders.
Latest Videos
Earthquake Damage, b-roll/bites
Up Next
The Trusted Voice of Risk and Insurance
Officia commodo dolore enim cupidatat aute anim exercitation velit velit. Laboris aliquip enim tempor commodo exercitation eu commodo.
Articles
No articles found.