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

The state of California set up its own earthquake insurance program for homeowners. The rates vary by ZIP Code, depending on the proximity of the nearest fault line. However, critics claim that the people who set the rates ignored soil type. Some houses rest on bedrock; others sit on unstable soil. What are the implications of such rate setting for possible adverse selection?


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  • CreatedNovember 13, 2014
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