Catastrophic earthquakes : the need to insure against economic disaster.

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Catastrophic earthquakes pose a grave and unique threat to society because they are rare and unpredictable, can potentially kill tens of thousands of people, cause billions of dollars in property damage, and wreak economic havoc on a nation's financial system. Preparation for a major earthquake can be best accomplished through a pre-funding mechanism. Insurance is the most efficient mechanism by which to accumulate the funds needed to rebuild and restore the economy after a catastrophic quake. Because the economic impact of a major earthquake is national in scope, so must be the solution. This means that in addition to the co-operation of state insurance regulators the federal government must be involved. Accordingly, a partnership between the federal government and the insurance industry through the creation of a Federal Earthquake Insurance and Reinsurance Corporation is the optimal means by which to restore the nation's economic viability in the event of a devastating earthquake