For the record I am in favor of homeowners having earthquake insurance in areas
where there is an earthquake hazard. BUT let me play devil's advocate for a moment
while Petra, an insurance peddler is on the line.
Why should I pay inflated rates of earthquake insurance when:
1) If an earthquake happens, there is no way the insurance company will be
able to meet all it's claims, and either they will go bankrupt, and I will be
left out in the cold, or they will find some reason not to pay my claim.
2) The government will bail me out with low-cost loans and emergency
appropriations which in the long run will cost me a lot less than earthquake
insurance, who knows I might even make a cent or two on it. Everybody
knows that this is what happens every time there is a flood on the Mississippi
or a hurricane in Florida.
3) Inflation has held at about 2% per year for the past 15 years. So, if the last
adjustment Mary Jane had on her earthquake insurance was 15 years ago,
a 30% increase would be reasonable. If that adjustment was made 3 years
ago, if I were Mary Jane, I'd be asking questions too.