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DEFRAYING THE ECONOMIC COSTS OF DISASTERS |
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EARTHQUAKES
Since 1900, earthquakes have occurred in 39 states and have caused damage in all 50. About 5,000 quakes can be felt each year. The earthquake and fire that devastated San Francisco on April 18, 1906 was one of the worst natural disasters in the United States. It produced insured losses of $235 million at the time, equivalent to $5.2 billion in 2007 dollars. A study by AIR Worldwide estimates the loss at $108 billion, were the quake to hit under today's economic and demographic conditions.
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THE TEN MOST COSTLY U.S. EARTHQUAKES
($ millions)
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Estimated property damage (1) |
Rank |
Year |
Location |
Magnitude |
Dollars when occurred |
In 2007 dollars (2) |
| 1 | 1994 | Northridge, CA | 6.7 | $13-20,000 | $18-$28,000 |
| 2 | 1989 | San Francisco Bay area; Loma Prieta, CA | 6.9 | 7,000 | 11,702 |
| 3 | 1964 | Alaska and west coast of United States (tsunami damage from earthquake near Anchorage, Alaska) | 9.2 | 500 | 3,344 |
| 4 | 1971 | San Fernando, CA | 6.5 | 553 | 2,831 |
| 5 | 2001 | Washington, Oregon | 6.8 | 2,305 | 2,698 |
| 6 | 1987 | Southern California; primarily in Los Angeles–Pasadena–Whittier area | 5.9 | 358 | 653 |
| 7 | 1933 | Long Beach, CA | 6.3 | 40 | 638 |
| 8 | 1952 | Kern County, CA | 7.5 | 60 | 469 |
| 9 | 1992 | Southern California; Landers–Joshua Tree–Big Bear | 7.6 | 92 | 136 |
| 10 | 1992 | Northern California Coast; Petrolia–Eureka | 7.1 | 66 | 98 |
(1) Includes insured and uninsured losses.
(2) Adjusted to 2007 dollars by the Insurance Information Institute.
Source: U.S. Department of the Interior, U.S. Geological Survey; Munich Re; Insurance Information Institute. |
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The previous chart ranks historic earthquakes based on their insured losses, adjusted for inflation. The chart below uses a computer model to measure the estimated impact of historical quakes according to current exposures. The analysis, based on AIR Worldwide's U.S. earthquake model, makes use of the firm's property exposure database and takes into account the current number and value of exposed properties in 2005, when the study was conducted.
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ESTIMATED INSURED LOSSES FOR THE TOP TEN HISTORICAL
EARTHQUAKES BASED ON CURRENT EXPOSURES (1)
($ billions)
Rank |
Date |
Location |
Magnitude |
Insured loss (current exposures) |
| 1 | Apr. 18, 1906 | San Francisco, CA | 7.9 | $108 |
| 2 | Feb. 7, 1812 | New Madrid, MO | 7.7 | 88 |
| 3 | Aug. 31, 1886 | Charleston, SC | 7.3 | 38 |
| 4 | Jan. 9, 1857 | Fort Tejon, CA | 7.9 | 27 |
| 5 | Oct. 21, 1868 | Hayward, CA | 6.8 | 25 |
| 6 | Jan. 17, 1994 | Northridge, CA | 6.7 | 16 |
| 7 | Jan. 5, 1843 | Marked Tree, AR | 6.5 | 12 |
| 8 | Jun. 1, 1838 | San Francisco, CA | 7.2 | 11 |
| 9 | Oct. 12, 1877 | Portland, OR | 6.3 | 11 |
| 10 | Jul. 1, 1911 | San Jose, CA | 6.6 | 9 |
(1) Modeled loss to property, contents and direct business interruption and additional living expenses for residential, mobile home, commercial and auto exposures as of December 31, 2005. Losses include demand surge. Policy conditions and earthquake insurance take up rates are based on estimates by state insurance departments and client claims data.
Source: AIR Worldwide Corporation. |
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