Homeowner aftershock: Insurers jack up earthquake insurance rates

Lita Epstein

Following the devastating earthquakes that hit Chile and Haiti, some insurance companies are hiking rates on earthquake insurance by as much as 200%. A recentLos Angeles Times article reported that California-based GeoVera Insurance Company nearly tripled one customer's premium, from $2,500 to $7,100 a year.

The question is: Are insurers playing on homeowner's fears that an earthquake may devastate their lives, too? Or are they trying to prevent their own financial disaster from occurring?