A Firm Foundation: How Insurance Supports the Economy

In 2018, a large 7.9 magnitude earthquake hit Kodiak Island, Alaska on January 23. Although according to the United States National Tsunami Warning Center, a small tsunami of less than eight inches was observed in a handful of Alaska cities, no significant damage was reported. 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.

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.

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 seventh costliest U.S. disaster, based on insured property losses (in 2017 dollars). Eight of the costliest U.S. quakes, based on inflation-adjusted insured losses, were in California, according to Munich Re.

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

($ millions)

        Insured losses (2)    
Rank Date Location Overall losses
when occurred
Dollars when
occurred
In 2018
dollars (3)
Fatalities
1 Jan. 17, 1994 California: Northridge, Los Angeles,
San Fernando Valley, Ventura, Orange
$44,000 $15,300 $26,373 61
2 Apr. 18, 1906 California: San Francisco, Santa Rosa, San Jose 525 180 4,628 3,000
3 Oct. 17, 1989 California: Loma Prieta, Santa Cruz,
San Francisco, Oakland, Berkeley, Silicon Valley
10,000 960 1,926 68
4 Feb. 28, 2001 Washington: Olympia, Seattle, Tacoma; Oregon 2,000 300 430 1
5 Oct. 1, 1987 California: Los Angeles County, Whittier 360 75 164 8
6 Aug. 24, 2014 California: Napa, Vallejo, Solano,
Sonoma, American Canyon
700 150 159 1
7 Nov. 30, 2018 Alaska: Anchorage, Wasilla, Palmer, Tok, Valdez 150 130 130 0
8 Apr. 4, 2010 California: San Diego, Calexico, El Centro,
Los Angeles, Imperial; Arizona: Phoenix, Yuma
150 100 116 0
9 Oct. 15, 2006 Hawaii: Big Island, Kailua Kona, Oahu, Honolulu 200 50 62 0
10 Aug. 23, 2011 Virginia: Mineral, Richmond; DC;
New York: New York; Maryland: Baltimore
150 50 56 0

(1) Costliest U.S. earthquakes occurring from 1980 to 2018, 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 2018 dollars by the Insurance Information Institute using the Bureau of Labor Statistics' Inflation Calculator.
(4) Inflation-adjusted to 2018 dollars based on 1913 Bureau of Labor Statistics data (earliest year available).

Source: © 2019 Munich Re, NatCatSERVICE; U.S. Department of Labor, Bureau of Labor Statistics; Insurance Information Institute.

View Archived Tables

The previous chart ranks historic earthquakes based on their total insured property losses, adjusted for inflation. The chart below measures the estimated impact of historical quakes based on current exposures. The analysis of exposures as of end-2016 is based on AIR Worldwide's U.S. earthquake model. It makes use of the firm's property exposure database and takes into account the current number and value of exposed properties. 

Estimated Insured Losses For The Top 10 Historical Earthquakes Based On Current Exposures (1)

($ billions)

Rank Date Location Magnitude 2017 insured loss
(current exposures)
1 1906 San Francisco, CA 7.8 $71
2 1811-1812 New Madrid, MO 7.7 59
3 1700 Cascadia Subduction Zone, WA, OR, CA 9.0 47
4 1838 San Francisco, CA 7.4 31
5 1886 Charleston, SC 7.3 30
6 1994 Northridge, CA 6.7 15
7 1868 Hayward, CA 7.0 15
8 1812 Wrightwood, CA 7.5 12
9 1857 Fort Tejon, CA 7.9 8
10 1989 Loma Prieta, CA 6.9 4

(1) Modeled loss to property, contents, business interruption and additional living expenses for residential, mobile home, commercial and auto exposures as of December 31, 2016. Losses include demand surge and fire following earthquake and account for tsunami, liquefaction and landslide. Policy conditions and earthquake insurance take-up rates are based on estimates by state insurance departments and client claims data. The model reflects recent updates to seismic and ground motion information as well as updated building characteristics of insured properties.

Source: AIR Worldwide Corporation.