In the wake of the earthquakes in Chile and Haiti, more people are considering the purchase of earthquake insurance and being shocked by its cost.

People who haven’t priced it for awhile say that rates in earthquake-prone areas have gone up 200 percent in the last year or two. Insurers blamed rising costs and tougher underwriting.

A bill before Congress, introduced by legislators in disaster-prone California and Florida, would allow insurers to mostly avoid buying reinsurance and rely on the federal government instead. That move could cut rates, but it also could be very risky for taxpayers.

Source: Los Angeles Times, David Lazarus (03/05/2010)

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