Standard fire insurance in 1906 San Francisco covered fire but excluded earthquake. When the quake hit April 18 and fires burned for three days afterward, that exclusion clause became the most consequential piece of fine print in California history. Earthquake damage? Your problem. Fire damage? File a claim.

The incentive was so naked that some property owners apparently helped it along. Contemporary accounts describe suspected arson — people torching their own earthquake-wrecked buildings to convert an uncovered loss into a covered one. The insurance industry had anticipated this, writing "fallen building" clauses to void coverage on structures that collapsed before the fire reached them. But proving sequence of destruction in a leveled city turned out to be difficult.

Six days after the fires went out, the city's Real Estate Board resolved that the catastrophe should be called "the Great Fire." The British consul general was blunt about why: if insurance doesn't pay, the city is finished. The financial instrument wrote the history.

A century later along the Gulf Coast, homeowners policies covered wind but excluded flood, and families watched adjusters argue over whether the ocean or the air had destroyed their house. Same arithmetic, different weather.