Are You Insured Against a Zombie Invasion?

CareFirst, a health insurance provider, thought referencing the zombie apocalypse would be a good way to sell insurance:

Naturally, this invited much ridicule from the Twitterverse. As many tweeters rightly noted, insurance is unlikely to pay out any claims in a zombie apocalypse. This point was also made by Eleanor Brown and Robert Prag in Ch. 9 of Economics of the Undead, “Zombification Insurance.” Brown and Prag observe that “None of those people running screaming through the streets in World War Z are looking for their claims adjusters. … In a full-blown zombie apocalypse, then, anybody who wants to run screaming through the streets in search of her claims adjuster should be heading for the courthouse where the insurers are filing their bankruptcy papers.”

But if that were the end of the story, Brown and Prag’s chapter would have been very, very short. It turns out that insurance might indeed play an important role in how we deal with zombies – just not during a full-blown zombie apocalypse. If zombies fail to cause the collapse of civilization and instead become more of an ongoing threat, much like car accidents and house fires, then we might well see the emergence of a market for zombification insurance. It might be stand-alone insurance to cover expenses from zombie infections and other undead damage, or it could be packaged with other forms of insurance such as life insurance, health insurance, and homeowner’s insurance. Depending on the contractual language, it’s possible that you’re already covered against zombie-related damage under your current policy!

One potential problem with zombification insurance, unmentioned by CareFirst, is that insurance can create moral hazard: the tendency of people to take greater risks when insured against losses. For instance, people with zombification insurance might not be as diligent about decapitating and disposing of the infected bodies of loved ones. It’s a tough thing to do anyway, and if there’s a chance Granny isn’t really infected, or if you think there’s a chance of a cure (or, as Brown and Prag suggest, cryonic preservation until such time as a cure is invented), you might take a chance on waiting. The insured might also take a chance on love with a zombie, as in the movie Warm Bodies. To deal with such contingencies, insurance providers might require substantial deductibles and copayments in order to expose the insured to some portion of the risk they create and provide an incentive to contain it.