Question: The state of California set up its own earthquake insurance

The state of California set up its own earthquake insurance program. Because the state agency in charge has few staff members, it pays private insurance carriers to handle claims for earthquake damage. These insurance firms receive 9% of each approved claim. Is this compensation scheme likely to lead to opportunistic behavior by insurance companies? What would be a better way to handle the compensation?


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  • CreatedNovember 13, 2014
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