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Southern California Hit by 2 Quakes — The Insurance Perspective

Posted By Administration, Tuesday, July 9, 2019

This is an ongoing story. It is being written late afternoon on Monday, July 8th. Damage estimates, the number of aftershocks and even more earthquakes could dramatically change the information included here.

At this point, this is what we know.

The Saturday 7.1 quake in Southern California is not “the” big one. Neither was Independence Day’s 6.4 magnitude shake. But both earthquakes have shaken residents of Southern California to the core.

A whopping 4,000 — so far — aftershocks haven’t helped things either.

California Governor Gavin Newsom believes damages to the cities of Trona and Ridgecrest will hit $100 million or more. He — like California Institute of Technology seismologist Lucy Jones — is thrilled that the quake didn’t hit in the middle of Los Angeles.

“We have a lot of buildings in the Los Angeles area that were built before we had any seismic building codes. Buildings, especially built before the 1976 code are the ones that we're most concerned about,” Jones said.

She thinks a similar quake there could see damages top $200 million.

Jones also worries about collapsed bridges, buildings and freeways and ruptured gas and power lines. She’s not only bothered about this happening in Los Angeles but worries about an event in San Francisco and San Diego.

“We’re going to have a magnitude 6, on average, somewhere in Southern California every few years. We’ve actually gone 20 years without one, so we have had the quietest 20 years in the history of Southern California,” she noted. “That’s unlikely to continue in the long run. Geology keeps on moving ... and we should be expecting a higher rate. And when it happens near people, it is going to be a lot worse.”

Newsom pointed out the state is spending more than $16 million to set up sensors to warn utilities and trains in advance. This helps them shut things down before even more damages can be done by an earthquake.

It won’t be much notice which is why Newsom thinks people can do more to protect themselves. He suggests more effort to find emergency escape routes and to be prepared with earthquake kits with food, water, battery powered lights and so on.

And then there’s purchasing earthquake insurance. That, too, would help.

Unfortunately, most residents ignore that purchase and in the case of many in the two quake areas, not all that many people have earthquake insurance. The California Department of Insurance says as of a year ago — the last study done — just 13% of the quake area’s residents have purchased earthquake insurance.

This in spite of efforts from officials to get homeowners and businesses to understand the danger. California Earthquake Authority CEO Glenn Pomeroy says geologists like Lucy Jones warned that there is a 99% chance of a 6.7 or greater magnitude quake within the next 30-years. That one happened on Saturday.

“It’s alarming to think only about 10% of homes in California have earthquake insurance,” Pomeroy said and pointed out that two-thirds of the earthquake risks in this country are in California. And he — too — says it’s lucky the earthquake happened in a less densely populated area and it is “likely that California would be looking at many more injuries and damages in the billions of dollars.”

Pomeroy went on to say, “This event is an important reminder that all of California is earthquake country. We need to listen to the experts in the field who’ve been telling us for some time we’re going to get hit again, that the pressures on the faults are building.”

Janet Ruiz of the Insurance Information Institute (I.I.I.) said changes are needed. “People in California don’t have to purchase earthquake insurance, generally speaking, when they are buying a home. It’s not a requirement like if you’re in a flood zone,” she said.

Pomeroy thinks cost is a factor. Earthquake insurance can be costly. On average it’s about $800 a year in California. Sacramento has an average of $300 and is affordable but Los Angeles is looking at $2,000.

So whether it is affordable depends on where you live.

In the meantime, assistance centers have been set up around the affected areas. They will help residents figure out how to recover financially if they don’t have insurance.

Source links: CBS Evening News, Associated Press, Insurance Business America, USA TODAY

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