Chile: Great Earthquake

Latest reports suggest the magnitude 8.8 earthquake that struck Chile early Saturday morning has resulted in more than 700 fatalities and the death toll is expected to rise as rescuers access the most damaged areas. It comes just weeks after the magnitude 7.0 earthquake that hit Haiti in January leaving up to 230,000 dead per Haitian government estimates. How could two such damaging earthquakes result in such different death tolls? According to catastrophe modeler AIR Worldwide, the epicenter in the Chile earthquake fortunately was located in a region with relatively low population density. By comparison, the recent Haiti earthquake struck close to Port-au-Prince, a city of more than 3 million people. AIR Worldwide also notes that Chile’s long history of damaging quakes has resulted in strict building codes, making the building stock considerably less vulnerable than Haiti’s. Still, the loss in Chile is likely to be severe not only in terms of damage to buildings, but from the widespread impact on infrastructure, including roads, bridges, airports, utilities and telecommunication networks. As a result, AIR Worldwide says total economic losses from the quake likely will be two to three times higher than insurable losses. Cat modeler EQECAT estimates total economic damage from the Chile quake to be in the range of $15 billion to $30 billion which equates to 10-15 percent of Chile’s real GDP. Check out  reports by and Guy Carpenter for more on this story. FYI the U.S. Geological Survey categorizes earthquakes of magnitude 8.0 and above as “great† and those of magnitude 7.0 to 7.9 as “major.† Although it may seem that we are having more earthquakes, USGS says earthquakes of magnitude 7.0 or greater have remained fairly constant. According to long-term records (since about 1900), it expects about 17 major earthquakes and one great earthquake in any given year. Check out I.I.I. info on earthquakes and insurance.

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