California should be made to pay for the earthquake risk that comes with development in the state, according to senior fellow Ian Adams at analyst firm R Street Institute.

Adams noted that currently, only 10% of Golden State residents buy earthquake insurance despite the fact that most of the major population centers here are at risk for damage.

Further, the analyst said in a blog post published in The Hill, residents get away with not paying for risk because California is a “nonrecourse state” which means that in the event of a disaster and the mortgage borrower defaults on the loan, all that a lender is entitled to is to recover the property itself, even if it is reduced to a pile of rubble.

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Thus, Adams recommended that the Federal Housing Finance Agency could propose rules that require states to only purchase mortgages that carry earthquake insurance, especially if the property carries significant risk.

“It is well past time for the residents of the Golden State to pay for their own risks,” Adams concluded.


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