CA Quake Exposure Update

California is the second leading state for earthquakes, with an average of over 160 earthquakes per year. The majority of the most costly earthquakes in U.S. history occurred in California. So a new study indicating that recent reforms to the state’s  workers comp  system would result in a substantial drop in the potential WC losses arising from earthquakes is welcome news. Based on the assumption of 15.6 million employees working statewide, the Workers’ Comp Insurance Rating Bureau of California study found that the expected annual loss for the state’s WC insurers would be slightly over $180 million, or $11.56 per employee, compared with $418.7 million, or $26.93 per employee, in a similar 2002 study. The updated study also projects the total statewide WC loss in a one-in-100 year quake would be $4.2 billion, and $6.3 billion for a one-in-200 year event. Looking at the 20 counties with the greatest exposure, the study puts Los Angeles County at the top of the list, with 4.25 million employees. While the drop in costs is a positive development, we note that WC is a compulsory  coverage for most businesses  in CA and that earthquake exposure continues to be significant. Check out I.I.I. earthquake facts & stats, workers comp info  and how insurers support the CA economy online. Further info is also available from the Insurance Information Network of California  (IINC).  

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