Insuring Landslides: America's Uninsured Natural Catastrophes

Christopher C. French
2015 Social Science Research Network  
Landslides occur in all fifty states and cause approximately $3.5 billion in property damage annually. Yet, in America, "all risk" homeowners and commercial property insurance policies exclude coverage for landslides, and there is only limited availability of expensive, stand-alone "named peril" insurance policies that cover landslide losses. Consequently, the affected homeowners are often left financially devastated-homeless with a mortgage to pay on an unsaleable piece of property. This
more » ... roperty. This Article analyzes the problem of insuring landslide losses in America and proposes ways to help solve it. It describes both historical and recent landslide events. It discusses the insurance industry's response to the problem of insuring landslides, including the theoretical justifications insurers historically have used to successfully exclude coverage for landslides-adverse selection, moral hazard and correlated risks. It also considers how other countries such as Belgium,
doi:10.2139/ssrn.2566238 fatcat:kcutlwmzffcvdo4ucux77b2jfq