California Earthquake Authority. §8 on Other Insurance says
a. If there is other insurance that covers earthquake loss to the dwelling or other property covered under this policy,we will pay our share of the covered loss or damage. Our share is the proportion that the applicable limit of insurance under this policy bears to the combined limits of insurance of all policies that cover the same property.
This reduces the value of my insurance policy (but not its cost to me) only because I have another policy, potentially with a competitor. It seems to have no purpose other than monopolism. Can it be an antitrust violation?
More competitive forms of insurance, such as life insurance, put options, credit default swaps, etc., do not have clauses of this sort. For example, a $1M life insurance policy does not lose value merely because you have a second one. And you can get as many as you like (for example, you get one with each new job, and you can generally keep it way past your time of employment). Obviously these life insurance companies, commodity derivatives, etc. companies can't write clauses like the CEA clause above -- they don't have monopolies and so they would go out of business if they did this. Is there anything legally non-monopolistic about the CEA clause quoted above?
Specifically, would CEA be in violation of anti-trust law if they suspended a claim because I either declined to discuss "Other Insurance", or because they found out about "Other Insurance" through some form of anti-competitive collusion?