There are a lot of other problems with their business model. It can take a long time to get paid and the insurance company will try to reduce the size of the payout. One of my colleagues had a serious house fire. She and her husband fought with the insurance company for over a year before any clean up or reconstruction began. They moved out of state and haven’t come back. Last I saw, the house is still empty. It’s been at least three years.
Now insurers are considering parametric insurance: if X happens, the payout is made immediately. X could be a hurricane or earthquake of a specific magnitude or any other measurable trigger.
Until recently, individual consumers didn’t have access to parametric insurance in the US. That’s changing: In October 2018, a company called Jumpstart started offering earthquake coverage to Californians. The trigger is a quake that reaches 30 centimeters per second of peak ground velocity, a measure the US Geological Survey uses to create “shake maps” of intensity.