Earthquakes continue to make their mark on 2011 with the damaging 7.2 magnitude quake in eastern Turkey on Sunday that has left hundreds dead and more than 1,300 injured.
The cities of Van, where the quake was centered, and Ercis, 45km to the north, felt the brunt of the quake and hundreds of building collapses have been reported.
As PC360 reports, the insurance losses from this catastrophe should be minimal due to low insurance penetration and take-up in the impacted area.
A report from catastrophe modeling firm Eqecat puts the preliminary estimate of insured losses from this event is in the range of $100 million to $200 million. Total economic damage is estimated in the low single-digit billions of dollars.
Eqecat goes on to note that insured losses will be incurred primarily by the Turkish Catastrophe Insurance Pool (TCIP), a national program of compulsory earthquake insurance for residential buildings.
The TCIP, started in 2000, is intended to minimize the rebuilding cost to the central government, and is backed by international reinsurers. Limits per policy are around $30,000, with deductibles commonly 2 percent.
However, Eqecat adds that estimates of TCIP penetration hover around 20 percent, and take-up rates in the east are less than this national average.
Eqecatâ€™s insured loss estimate is based on much of the damage having struck residential buildings.
Damaged buildings will number in their thousands, it adds, as aftershocksÂ cause furtherÂ damage or collapse. Buildings in the region are a mixture of vulnerable and resistant construction.