Background on: Earthquake insurance and risk

The topic

An earthquake is a sudden and rapid shaking of the earth caused by the breaking and shifting of rock beneath the earth’s surface. This shaking can sometimes trigger landslides, avalanches, flash floods, fires and tsunamis. Unlike other natural disasters such as hurricanes, there are no specific seasons for earthquakes.

Earthquakes in the United States are not covered under standard homeowners or business insurance policies. Coverage is usually available for earthquake damage in the form of an endorsement to a home or business insurance policy. However, insurers that don’t sell earthquake insurance may still be impacted by these catastrophes due to losses from fire following a quake. These losses could involve claims for business interruption and additional living expenses as well. Cars and other vehicles are covered for earthquake damage under the comprehensive part of the auto insurance policy.

The U.S. has about 20,000 earthquakes a year, mostly small, and 42 states are at risk of quakes, according to the U.S. Geological Survey. One of the worst catastrophes in U.S. history, the San Francisco Earthquake of 1906, would have caused insured losses of $96 billion, were the quake to hit under current economic and demographic conditions, according to AIR Worldwide.

The potential cost of earthquakes has been growing because of increasing urban development in seismically active areas and the vulnerability of older buildings, which may not have been built or upgraded to current building codes.

The Northridge earthquake, which struck Southern California on January 17, 1994, was the most costly quake in U.S. history, causing an estimated $44 billion in total property damage when occurred, including $24.5 billion in insured losses in 2014 dollars.

The California Earthquake Authority, the state-run entity that is the largest provider of earthquake insurance in the U.S., said it had more than 950,000 policies in force in the state at the end of the second quarter of 2017. Only about 11 percent of California's homeowners had purchased earthquake coverage in 2016, according to the California Insurance Department.

Recent developments

  • 2017 Global Earthquake Losses: Swiss Re’s sigma reports that natural and man-made catastrophes caused $144.3 billion in insured losses world-wide in 2017.  Global earthquakes caused $1.6 billion of those insured losses and killed 1,184 people in 12 quakes.
  • In September 2017, Mexico experienced two of the strongest earthquakes recorded in the country. On September 7, a record-strength 8.1 magnitude quake struck Tehuantepec, Mexico and Guatemala, killing 98 people and causing $400 million in insured losses. On September 19, a 7.1 magnitude quake struck Puebla.  It produced strong ground motion in major cities in central Mexico and killed 369 people and caused $1.2 billion in insured losses.
  • 2016 Global Earthquake Losses: Natural catastrophes and man-made disasters resulted in $53.5 billion in insured losses in 2016, according to Swiss Re's sigma. Insured losses from global earthquakes totaled $9 billion compared with $510 million in 2015. There were 16 catastrophic earthquakes that killed 1,386 people
  • On April 16, 2016, a magnitude 7.8 earthquake hit Ecuador, killing at least 525 people and injuring more than 2,500 others. About 80 percent of homes were destroyed or left in bad condition in the coastal town of Pedernales, home to about 50,000 residents and a popular tourist spot. The earthquake was centered about 17 miles southeast of the coastal city of Muisne, and felt as far away as Quito—more than 100 miles east of the epicenter, according to the U.S. Geological Survey. Ecuador’s Geophysical Institute reported 154 aftershocks within hours after the earthquake.
  • On April 14-16, 2016, 69 people died after two strong earthquakes struck Kumamoto prefecture on Japan's southern island of Kyushu. A magnitude 6.5 quake shook the area on the evening of April 14, and 28 hours later a magnitude 7.3 quake struck. According to the Japan Meteorological Agency, there have been 444 aftershocks in the Kyushu area since the first earthquake hit.
  • Fracking: Hydraulic fracturing, commonly known as fracking, is a drilling technique used to extract natural gas and oil from the ground. The process involves injecting large amounts of drilling fluids into wells. Critics charge that the wastewater produced by the process can cause drinking water to be polluted. But some energy companies, state authorities and environmentalists contend that poor construction of wells, rather than the process itself, is the cause of the pollution. There is, however, some evidence that fracking has contributed to an increase in the number of earthquakes. In March 2013 researchers at the University of Oklahoma, Columbia University and the U.S. Geological Survey determined that the 5.7 magnitude earthquake that hit Oklahoma in 2011 was caused by the disposal of wastewater from oil production. The findings were published in the journal Geology. In April 2012 the U.S. Geological Survey released a study that concluded that a series of earthquakes in the middle of the U.S. was the result of human activity and that fracking could be the cause.
  • In March 2015 the U.S. Geological Survey released a report showing that the recent small earthquakes across Oklahoma, which have been linked to fracking, are reactivating long dormant fault lines that are 300 million years old. The new research concludes that the faults could produce quakes with far higher magnitudes than the more than 3,600 small tremors that were recorded in central Oklahoma from 2009 through 2014. The report will be used to develop a new earthquake hazard map for Oklahoma that the survey will issue later in 2015.
  • Earthquake Risk and Nuclear Plant Safety in the U.S.: In January 2012 the NRC, the U.S. Department of Energy and the Electric Power Research Institute released a seismic study and model intended to help nuclear power plants in the central and eastern parts of the U.S. reassess their vulnerability to earthquakes. The study found that nuclear reactors in the region face bigger threats from big earthquakes than were previously recognized. The model, which came out of the study, replaces previous models used by the government and the nuclear power industry since the late 1980s. The NRC will require nuclear plant operators to conduct new studies for all 96 reactors in the regions.
  • Studies: A March 2015 forecast from the U.S. Geological Survey (USGS) has upped the likelihood that California will be hit by a magnitude 8 earthquake over the next 30 years to 7 percent from 4.7 percent forecast in a 2008 report. The most recent calculations differ from those in the earlier USGS forecast in that scientists took into account the possibility that a quake can move from one fault to another, releasing more seismic energy, as well as including newly discovered fault zones. Scientists also said that the probability that the state will be shaken by a magnitude 6.7 quake, similar to the devastating 1994 Northridge temblor, is higher than 99 percent.
  • In July 2014 the U.S. Geological Survey updated its U.S. National Seismic Hazard Maps for the first time since 2008. The new maps reflect the best and most current understanding of where future earthquakes will occur, how often they will occur, and how hard the ground will likely shake as a result. The new maps show that 42 states are at risk, with 16 states that have experienced earthquakes with a magnitude 6 or greater and which are considered at high risk. Earthquake hazard is especially high on the West Coast, the intermountain west and in several active regions of the central and eastern U.S., including New Madrid, Missouri and near Charleston, South Carolina. Highlights by region include the East Coast, which has the potential for larger and more damaging earthquakes than considered in previous maps and assessments; the central U.S., where the New Madrid Seismic Zone has been identified to have a larger range of potential earthquake magnitudes and locations than previously identified; and the West Coast, where earthquake hazard in California extends over a wider area than previously thought. In California faults were recently discovered, raising earthquake hazard estimates for San Jose, Vallejo and San Diego.
  • In a study published in Earthquake Spectra, the journal of the Earthquake Engineering Research Institute, in February 2013, scientists at the U.S. Geological Survey warn that more fatalities will result from catastrophic earthquakes this century than ever before because populations in the regions of the world prone to quakes are increasing. The researchers estimate that 21 catastrophic earthquakes with more than 50,000 fatalities will occur before the end of this century, compared with only seven quakes of such magnitude during the 20th century, and that at least 3.5 million will die, more than twice the 1.5 million killed in the 20th century.
  • Earthquake Coverage: Eight percent of homeowners responding to a May 2016 poll by the Insurance Information Institute said they have earthquake insurance. Homeowners in the West were most likely to have earthquake insurance with 14 percent saying they had the coverage followed by the Midwest at 7 percent; and the South and Northeast at 6 percent.
  • The California Earthquake Authority (CEA) was created in 1996 two years after the devastating Northridge Earthquake caused huge losses for homeowners insurers in the state. The California Legislature established the CEA as a publicly managed, largely privately funded entity. The CEA collected about $620 million in premium in 2016 and its claims paying capacity totaled $13.2 billion. The CEA has paid out only $3.6 million in losses since its inception in 1996.

The chart below shows losses based on total damages (including insured and uninsured losses) when occurred. The costliest U.S. earthquake, the 1994 Northridge quake, caused $15.3 billion in insured damages when it occurred ($25.6 billion in 2017 dollars). It ranks as the fifth-costliest U.S. disaster, based on insured property losses (in 2016 dollars), topped only by Hurricane Katrina, the attacks on the World Trade Center, Hurricane Andrew and superstorm Sandy. Eight of the costliest U.S. quakes, based on inflation-adjusted insured losses, were in California, according to Munich Re. In 2017 the biggest earthquake in the United States was a magnitude 6.2 quake that occurred on May 1 in Skagway, Alaska. No significant damage was reported. In 2018, a large 7.9 magnitude earthquake hit Kodiak Island, Alaska on January 23. No significant damage was reported from the quake or an insignificant tsunami that was observed in a handful of Alaska cities, according to the United States National Tsunami Warning Center. On May 4, a 6.9 magnitude quake struck the Big Island of Hawaii, caused by the eruption of Mount Kilauea. No significant damage was reported. As the eruption continued, a 5.5 magnitude earthquake was recorded on June 3. The eruption caused about 500 quakes in one day.

Top 10 Costliest U.S. Earthquakes By Inflation-Adjusted Insured Losses (1)

($ millions)

        Insured losses (2)  
Rank Date Location Overall losses
when occurred
In 2017
dollars (3)
1 Jan. 17, 1994 California: Northridge, Los Angeles,
San Fernando Valley, Ventura, Orange
$44,000 $15,300 $25,635 61
2 Apr. 18, 1906 California: San Francisco, Santa Rosa, San Jose 525 180 4,499 3,000
3 Oct. 17, 1989 California: Loma Prieta, Santa Cruz, San Francisco,
Oakland, Berkeley, Silicon Valley
10,000 960 1,872 68
4 Feb. 28, 2001 Washington: Olympia, Seattle, Tacoma; Oregon 2,000 300 418 1
5 Mar. 27-28, 1964 Alaska: Anchorage, Kodiak Island, Seward, Valdez,
Portage, Whittier, Cordova, Homer, Seldovia
540 45 357 131
6 Feb. 9, 1971 California: San Fernando Valley, Los Angeles 550 35 215 65
7 Oct. 1, 1987 California: Los Angeles, Whittier 360 75 159 8
8 Aug. 24, 2014 California: Napa, Vallejo, Solano, Sonoma,
American Canyon
700 150 154 1
9 Apr. 4, 2010 California: San Diego, Calexico, El Centro, Los Angeles,
Imperial; Arizona: Phoenix, Yuma
150 100 112 0
10 Sep. 3, 2000 California: Napa 80 50 71 0

(1) Costliest U.S. earthquakes occurring from 1950 to 2017, based on insured losses when occurred. Includes the 1906 San Francisco, California, earthquake, for which reliable insured losses are available.
(2) Based on property losses including, if applicable, agricultural, offshore, marine, aviation and National Flood Insurance Program losses in the United States and may differ from data shown elsewhere.
(3) Inflation-adjusted to 2017 dollars by the Insurance Information Institute using the Bureau of Labor Statistics' Inflation Calculator.
(4) Inflation-adjusted to 2017 dollars based on 1913 Bureau of Labor Statistics data (earliest year available).

Source: © 2018 Munich Re, NatCatSERVICE; Insurance Information Institute.

View Archived Tables

Top 10 Costliest World Earthquakes And Tsunamis By Insured Losses, 1980-2017 (1)

($ millions)

      Losses when occurred  
Rank Date Location Overall Insured (2) Fatalities
1 Mar. 11, 2011 Japan: Aomori, Chiba, Fukushima, lbaraki, lwate, Miyagi, Tochigi, Tokyo, Yamagata. Includes tsunami. $210,000 $40,000 15,880
2 Feb. 22, 2011 New Zealand: Canterbury, Christchurch, Lyttelton 24,000 16,500 185
3 Jan. 17, 1994 USA (CA): Northridge, Los Angeles, San Fernando Valley, Ventura, Orange 44,000 15,300 61
4 Feb. 27, 2010 Chile: Concepcion, Metropolitana, Rancagua, Talca, Temuco, Valparaiso. Includes tsunami. 30,000 8,000 520
5 Sep. 4, 2010 New Zealand: Canterbury, Christchurch, Avonside, Omihi, Timaru, Kaiapoi, Lyttelton 10,000 7,400 0
6 Apr. 14-16, 2016 Japan: Kumamoto, Aso, Chuo Ward, Mashiki, Minamiaso, Oita, Miyazaki, Fukuoka, Yamaguchi 32,000 6,200 205
7 Jan. 17, 1995 Japan: Hyogo, Kobe, Osaka, Kyoto 100,000 3,000 6,430
8 Nov. 13, 2016 New Zealand: Canterbury, Kaikoura, Waiau, Wellington, Marlborough, Picton 3,900 2,100 2
9 Jun. 13, 2011 New Zealand: Canterbury, Christchurch, Lyttelton 2,700 2,100 1
10 Sep. 19, 2017 Mexico: Puebla, Morelos, Greater Mexico City 6,000 2,000 369

(1) As of January 2018. Ranked on insured losses when occurred.
(2) Based on property losses including, if applicable, agricultural, offshore, marine, aviation and National Flood Insurance Program losses in the United States and may differ from data shown elsewhere.

Source: © 2018 Munich Re, Geo Risks Research, NatCatSERVICE; Wikipedia.

View Archived Tables

Top Ten Deadliest World Earthquakes/Tsunamis, 1980-2015 (1)

($ millions)

      Losses when occurred
Rank Date Location Overall Insured Fatalities
1 Dec. 26, 2004 Indonesia; India; Sri Lanka; Thailand; Maldives;
Myanmar; Bangladesh; Malaysia. Includes tsunami.
$10,000 $1,000 220,000
2 Jan. 12, 2010 Haiti (esp. Port-au-Prince) 8,000 200 159,000
3 Oct. 8, 2005 Pakistan; India 5,200 5 88,000
4 May 12, 2008 China (Sichuan) 85,000 300 84,000
5 Jun. 20, 1990 Iran (esp. Manjil, Rudbar) 7,100 100 40,000
6 Dec. 26, 2003 Iran (esp. Bam) 500 20 26,200
7 Dec. 7, 1988 Armenia (esp. Spitak) 14,000 NA 25,000
8 Aug. 17, 1999 Turkey (esp. Izmit) 12,000 600 17,120
9 Mar. 3, 2011 Japan (Honshu).  Includes tsunami. 210,000 40,000 15,840
10 Jan. 26, 2001 India (Gujarat); Pakistan 4,600 100 14,970

(1) As of June 2016.

NA=Data not available.

Source: © 2016 Munich Re, Geo Risks Research, NatCatSERVICE.


Japan earthquake and tsunami: On March 11, 2011 an earthquake and Tsunami struck northeast Japan, killing thousands of people and injuring many others. The tsunami was generated by a 9.0 magnitude earthquake approximately 80 miles offshore and about 230 miles northeast of Tokyo. The Japan earthquake cost the insurance industry an estimated $35 billion, a fraction of the total losses, which are now estimated at $210 billion.

Earthquake Forecasts: In April 2008 experts from the U.S. Geological Survey, USC’s Southern California Earthquake Center and the State Geological Survey released an earthquake forecast indicating that a huge quake is far more likely in Southern California than in Northern California in the next 30 years. The report also concluded that the state is virtually certain to be hit by a major earthquake by 2028. The researchers found that the chance of a 6.7 magnitude temblor, equal to the 1994 Northridge quake, is 97 percent in Southern California and 93 percent in Northern California. The likelihood of a 7.5 quake, which is 16 times more intense than a 6.7 quake, is 37 percent in Southern California and 15 percent in Northern California. The study used new information about prehistoric earthquakes, locations of faults and their slip rates, and satellite data of the movement of the Earth’s crust to calculate the likelihood of earthquakes in the state.

Insurance Coverage for Earthquakes in the United States: Standard homeowners, renters and business insurance policies do not cover damage from earthquakes. Coverage is available either in the form of an endorsement or as a separate policy for homeowners, renters and small business owners. Unlike flood insurance, earthquake coverage is available from private insurance companies rather than from the government. In California, homeowners can also get coverage from the California Earthquake Authority (CEA), a privately funded, publicly managed organization.

Earthquake insurance provides protection from the shaking and cracking that can destroy buildings and personal possessions. Coverage for other kinds of damage that may result from earthquakes, such as fire and water damage due to burst gas and water pipes, is provided by standard home and business insurance policies in most states. Cars and other vehicles are covered for earthquake damage by comprehensive insurance which also provides protection against flood and hurricane damage as well as theft.

Deductibles and Costs: Earthquake insurance carries a deductible, generally in the form of a percentage rather than a dollar amount. Deductibles can range anywhere from 2 percent to 20 percent of the replacement value of the structure. This means that if it cost $100,000 to rebuild a home and there was 2 percent deductible, the consumer would be responsible for the first $2,000 dollars. Insurers in states like Washington, Nevada and Utah, with higher than average risk of earthquakes, often set minimum deductibles at around 10 percent. In most cases, consumers can get higher deductibles to save money on earthquake premiums.

The standard CEA policy includes a deductible that is 15 percent of the home’s replacement cost. The basic policy covers only the house (other structures such as garages, pools, etc. are not covered). Personal possessions are covered up to $5,000 and “loss of use” expenses, the additional cost of living elsewhere while home repairs are made, are covered up to $1,500. Recognizing that some people want more comprehensive coverage, the CEA also offers a 10 percent deductible, insurance for other structures, personal items coverage up to $100,000 and $15,000 in “loss of use” coverage. Premiums vary widely among the 19 rating territories, based on the type of house, its age, the nature of the soil, and proximity to known fault lines. The CEA has reserves of about $9 billion.

Premiums also differ widely by location, insurer and the type of structure that is covered. Generally, older buildings cost more to insure than new ones. Wood frame structures generally benefit from lower rates than brick buildings because they tend to withstand quake stresses better. Regions are graded on a scale of 1 to 5 for likelihood of quakes, and this may be reflected in insurance rates offered in those areas. The cost of earthquake insurance is calculated on “per $1,000 basis.” For instance, a frame house in the Pacific Northwest might cost between one to three dollars per $1,000 worth of coverage, while it may cost less than fifty cents per $1,000 on the East coast.

A brick home would cost approximately $3 to $15 dollars per $1,000 in the Pacific Northwest, while it would cost between 60 to 90 cents in New York. Earthquake insurance is available from most insurance companies in most states. California law requires homeowners insurance companies to offer earthquake coverage to their homeowners insurance policyholders. Homeowners can decide to purchase it, purchase a policy from another insurer or decline it altogether.

In January 1994 the Northridge earthquake, a magnitude 6.8 quake (see section on Earthquake Measurement), struck Southern California, causing an estimated $12.5 billion in insured losses, according to ISO. The insurance industry ended up paying out more in claims for this quake than it had collected in earthquake premiums over the preceding 30 years. While no insurer became insolvent, some came very close. To recover their financial strength and to be better prepared for the next earthquake, most insurers began to limit their exposure to earthquakes by writing fewer new homeowners insurance policies. In addition, most insurers filed for both rate increases and increases in deductibles from the 10 percent that was current then to 15 percent or higher. This triggered a crisis that by mid-1996 threatened the vitality of the state’s housing market and stalled the state’s recovery from recession.

What Are Earthquakes and Where Do They Occur? An earthquake is a sudden, rapid shaking of the earth caused by the breaking and shifting of rock beneath the earth's surface. For hundreds of millions of years, the forces of plate tectonics have shaped the earth as the huge plates that form the Earth's surface move slowly over, under, and past each other.

Sometimes the movement is gradual. At other times, the plates are locked together, unable to move. When the pressure building up grows strong enough, the plates break free causing the ground to shake and rupture along fault lines, or zones of weakness.

One of the most famous faults is the San Andreas Fault, which extends about 600 miles from the Gulf of California northwest along the California coast. The 1906 San Francisco earthquake was caused by movement of the San Andreas Fault.

Quakes can produce different kinds of shaking. Some, like the 6.8 magnitude (see section on Earthquake Measurement) Northridge quake, are thrust fault quakes, which cause violent up-and-down, rather than the more common side-to-side movement. Ground shaking from earthquakes can collapse buildings and bridges as well as trigger landslides, avalanches, floods, fires, and tsunamis. Buildings with foundations resting on unconsolidated landfill and other unstable soil, and trailers and homes not tied to their foundations are at risk because they can be shaken off their mountings during an earthquake.

According to the U.S. Geological Survey, there are more than three million earthquakes worldwide each year. While the vast majority of those are a magnitude 3.9 or lower, more than 900 earthquakes measure 5.0 or higher each year. About 81 percent of the world’s largest earthquakes occur in the Circum-Pacific seismic belt. The area extends from Chile, northward along the western South American coast through Central America, Mexico, the west coast of the United States and the southern part of Alaska, through the Aleutian Islands to Japan, the Philippine Islands, New Guinea, the island groups of the Southwest Pacific and to New Zealand.

The most powerful earthquake on record occurred in Chile on May 22, 1960. The magnitude 9.5 quake caused $550 million in damage, killed more than 2,000 people and injured more than 3,000. It also caused a tsunami, which caused additional destruction in Hawaii, Japan, the Philippines and the West coast of the United States.

Earthquake Risk in the United States: The first national study of earthquake risk in the United States was released by the Federal Emergency Management Agency (FEMA) in September 2000. The study estimated that over time earthquake losses in the United States could average $4.4 billion dollars a year. This estimate includes only capital losses, such as repairing or replacing buildings, contents and inventory ($3.49 billion), and loss of income, including business interruption, rental income and wage losses ($0.93 billion). It does not cover damage and losses to critical facilities, transportation and utility lines or indirect economic losses.

The $4.4 billion estimate of probable annual earthquakes losses is close to the losses from floods and hurricanes. Flood losses averaged $5.2 billion annually during the period 1989 to 1998, according to the National Weather Service. The National Climatic Data Center estimates $5.4 billion in annual hurricane losses for the same period.

The report also points out that the potential cost of earthquakes has been growing because of increasing urban development in seismically active areas and the vulnerability of older buildings, which may not have been built or upgraded to current building codes. According to the study, 84 percent of the nation's annual losses are expected to occur in California, Oregon and Washington, with California accounting for the lion’s share. Other areas at risk include the central United States, within the New Madrid Seismic zone, which includes parts of Illinois, Kentucky, Tennessee, Missouri, and Arkansas, and the Charleston, South Carolina area. In addition to California metropolitan areas, cities ranked among the top 40 high-loss potential urban areas include Seattle, Portland, New York City, Salt Lake City and St. Louis.

The study pointed out the need for increased recognition of metropolitan areas with “low seismic hazard” but “high seismic risk,” such as New York City and Boston, which have high concentrations of buildings and an infrastructure that was built without taking into account seismic codes. Although the likelihood of catastrophic quakes occurring in these areas is statistically low, the potential cost is very high. In addition, because of the perception of low risk, neither the public nor the private sector has developed earthquake preparedness programs that teach people how to protect against earthquake damage and injury.

In the continental United States, earthquakes occur most frequently west of the Rocky Mountains. Historically, the most violent earthquakes have occurred in the central United States. The largest earthquake in the continental United States was along the New Madrid Fault in Missouri, where a three-month long series of quakes in 1811-1812 included three quakes larger than a magnitude of 8. The state with the most major earthquakes is Alaska, but the one with the most damaging earthquakes is California.

The largest earthquake in the United States was a magnitude 9.2 quake that struck Alaska on March 28, 1964. The earthquake and ensuing tsunami caused more than $500 million in property losses, according to the National Geophysical Data Center.

The most costly earthquake in the United States was the Northridge, California, earthquake of January 17, 1994, with insured losses estimated at $12.5 billion, according to ISO.

Earthquake Risk in the Western United States: Although the entire Northwest of the United States is at high risk of earthquakes, nine of the most costly earthquakes in the last century occurred in California. According to the U.S. Geological Survey, there is a 70 percent probability that an earthquake of magnitude 6.7 or larger will strike the San Francisco Bay area over the next 30 years. The San Francisco earthquake in 1906 measured 8.3 on the Richter scale and caused direct quake losses of about $24 million, as well as fire losses of about $500 million, according to the National Geophysical Data Center. Beside the 1994 Northridge quake, large, recent quakes in California include the 7.6 magnitude Landers quake in 1992 that caused $92 million dollars of insured losses, the 6.9 magnitude Eureka quake in 1992 that resulted in $66 million dollars of insured losses, and the 7.0 Loma Prieta quake in 1989 that resulted in more than $7 billion in insured losses, 62 deaths and 3,757 injuries.

Earthquake Risk in the Central United States: The New Madrid Fault zone lies within the central Mississippi valley extending from northeastern Arkansas through southeastern Missouri, western Tennessee, Kentucky and southern Illinois. The last major earthquake, magnitude 8, occurred there in 1812. But scientists warn that this was not a freak occurrence. Earthquakes in central and eastern United States affect much larger areas than earthquakes of similar magnitude in the West. For example, the San Francisco earthquake of 1906 was felt 350 miles away, whereas the New Madrid earthquake of December 1811 rang church bells in Boston, Massachusetts, 1,000 miles away.

Earthquake Risk in the Eastern United States: The largest earthquake in the East was a 7.5 temblor that struck Charleston, South Carolina, in 1886, killing over 60 people. While the risk of an earthquake in the Northeast is not nearly as high as in the West, the region is seismically active. A 6.0 earthquake struck Boston in 1755 and a 5.8 earthquake struck the northern part of New York State in 1944. Near New York City, there have been two 5.0 to 5.3 earthquakes, one in 1737 and the other in 1884. Experts say an earthquake of between 6.5 and 7.5 in possible in the Northeast, but estimate that it may occur “in the order of thousands of years.”

Applied Insurance Research, a catastrophe modeling firm, points out that large numbers of buildings in both Boston and New York City were built long before the introduction of seismic building codes. Many of the older structures in the two cities are made of unreinforced masonry, the most vulnerable to earthquake damage. Worse, much of Boston is built on artificial fill, which can amplify seismic waves by as much as a factor of three. New York is less vulnerable, being largely built on bedrock.

Earthquake Measurement: The size and magnitude of an earthquake is measured in several different ways. The Richter Scale measures the size of earthquake waves. It was developed by Charles Richter in the 1930s and is a logarithmic measurement of the amount of energy released by an earthquake, see below. The Mercalli Intensity Scale evaluates the intensity of a quake according to observed severity at specific locations. It rates the intensity on a Roman numeral scale that ranges from I to XII. Today, seismologists are using the Moment Magnitude Scale, which measures the size of the earthquake’s fault, and how much of the earth slips at the time of the quake. A number of readings are taken, averaged and then adjusted to generate numbers similar to the Richter Scale. This allows the magnitude of earthquakes measured on these new scales to be compared with earthquakes recorded earlier. According to the Moment Magnitude Scale, the severity of an earthquake is categorized as the following:

5.0 Small
5.0 – 6.0 Moderate
6.0 – 7.0 Large
7.0 - 7.8 Major
7.8 Great

An increase of one unit of magnitude, for example, from a 4.0 to a 5.0 quake, is a 10-fold increase in wave amplitude on a seismogram, or about a 30-fold increase in energy released. Thus, the difference between a 4.0 and a 6.0 magnitude quake would be a release of energy 900 times (30 times 30) as great as a 4.0 magnitude quake since the magnitude is a logarithmic value.

Legislation: In 1977 the United States Congress enacted the Earthquake Hazards Reduction Act, in recognition of the fact that earthquakes pose the greatest potential threat of any single-event natural hazard confronting the nation. The Act directed the President to "establish and maintain an effective earthquake hazards reduction program."

Congress then created the National Earthquake Hazards Reduction Program, which gave lead responsibility to the federal government to provide direction, coordination, research and other support to efforts aimed at earthquake hazard mitigation and preparedness. The Federal Emergency Management Agency (FEMA), the United States Geological Survey, the National Science Foundation, and the National Institute of Standards and Technology were assigned specific roles. Recommendations were included on the duties of state governments, local governments, private organizations and individuals.

Earthquake Safety/Loss Mitigation: Although earthquakes cannot be prevented, science and engineering provide tools that can be used to reduce their damage. Science can now identify, with considerable accuracy, where earthquakes are likely to occur and what forces they will generate. Engineering can help provide design and construction techniques so that buildings and other structures can survive the tremendous forces of earthquakes.

To produce estimates of earthquake loss by geographic area, FEMA uses an earthquake loss estimation methodology called Hazards U.S. (HAZUS), developed in cooperation with the National Institute of Building Sciences. The loss estimation methodology is a software program that uses mathematical formulas and information about building stock, local geology and the location and size of potential earthquakes, economic data, and other information to estimate losses from a potential earthquake. HAZUS is capable of using two separate geographic information systems (MapInfo® and ArcView®) to map and display ground shaking, the pattern of building damage, and demographic information about a community. Once the location and size of a hypothetical earthquake is identified, HAZUS will estimate the violence of ground shaking, the number of buildings damaged, the number of casualties, the amount of damage to transportation systems, disruption to the electrical and water utilities, the number of people displaced from their homes, and the estimated cost of repairing projected damage and other effects.

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Preparing for an earthquake
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Recovering from an earthquake