Article
Insuring Landslides: America’s Uninsured Natural Catastrophes
Nevada Law Journal
(2016)
Abstract
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 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, France, New Zealand, Norway, Romania, Switzerland, Iceland and Australia address the issue of insuring landslide losses. It concludes by offering two ways to transform the insurance market for landslide losses in America.
Keywords
- landslides,
- insurance,
- natural catastrophes,
- all risk,
- homeowner,
- adverse selection,
- moral hazard,
- correlated risks,
- comparative law,
- property
Disciplines
Publication Date
2016
Citation Information
Christopher C. French, Insuring Landslides: America’s Uninsured Natural Catastrophes, 17 Nev. L. J. 63 (2016)