The earthquake on Monday, August 12, in Southern California underscores the pressing need for the insurance industry to reassess its approach to earthquake coverage. With rising premiums and deductibles, insurers are increasingly vulnerable to significant financial exposure as more homeowners opt out of coverage.
Potential Regulatory Scrutiny
The event could prompt regulatory bodies to scrutinize the availability and affordability of earthquake insurance, pushing insurers to innovate with new products or risk-sharing mechanisms that could help mitigate these challenges.
Industry-Wide Collaboration
Insurers might need to collaborate on broader initiatives, such as public-private partnerships or pooling resources, to maintain market stability and provide more accessible coverage in high-risk areas.