Californians are taking out earthquake insurance on their homes as experts warn that the state is overdue a large seismic shock. The California Earthquake Authority (CEA) said 52,000 policies were bought in 2016, compared to the annual average of 7,200, lifting the number of active policies to 950,000. Another 18,804 have been taken out this year alone, despite the fact that mortgage lenders don't require buyers to have coverage. In an interview with CNN, CEA Director Mark Ghilarducci warned that if there was another major quake along California's fault line, it could cause "catastrophic damage."
Californians are taking out earthquake insurance on their homes as experts warn that the state is overdue a large seismic shock. The California Earthquake Authority (CEA) said 52,000 policies were bought in 2016, compared to the annual average of 7,200, lifting the number of active policies to 950,000. Another 18,804 have been taken out this year alone, despite the fact that mortgage lenders don't require buyers to have coverage. The CEA's claims capacity has reached $15bn, helped by the use of catastrophe bonds to transfer risk to the capital markets.