On 18 April 1906 a major earthquake hit San Francisco , and the resulting fires destroyed over 80 % of the city , killed thousands of people , and left half of the population homeless . Misled by local propaganda as to earthquake likelihood , few residents of San Francisco had bought earthquake insurance , but they had bought fire insurance . In the wake of the devastating fires following the earthquake , many insurance companies fought paying their policyholders , often by quibbling over causality ( since the insurance was not for earthquakes ) , or paying only 75 % of the amounts due . This led to many lawsuits from policyholders . At least 14 insurers went bankrupt , and some insurers – mostly German and Austrian – simply disappeared and denied all coverage
a major earthquake
1906 San Francisco earthquake
Cuthbert Heath