One of the largest earthquakes to affect the U.S. in recent memory recently hit the California area, but it still has yet to be determined if the temblor was one that could go down as among the strongest ever to be recorded in the Golden State, based on newly released analysis from the Insurance Information Institute.
On Aug. 24, a 6.0 magnitude earthquake hit the California area. Fortunately, no one was seriously hurt or killed as a result of the ground-shaking event, but there was a large amount of damage that resulted.
Though the exact numbers have yet to be revealed, insurance losses would have to be significant to rival the one that occurred 10 years ago in Northridge, Robert Hartwig, economist and president of the III, pointed out.
"The January 1994 Northridge, California quake registered a 6.7 magnitude on the Richter scale, and caused $24 billion in insured losses, in 2013 dollars," said Hartwig. "As such, Northridge is the costliest quake, in terms of insured claim payouts, in U.S. history while the October 1989 Loma Prieta earthquake, a 6.9 magnitude event, is third on that same list, generating $1.8 billion in insured losses, also in 2013 dollars."
Some may be under the impression that earthquakes coverage is a standard part of home insurance. In reality, it has to be added on to a standard policy in order to be adequately compensated for property loss. III pointed out that based on numbers from the California Earthquake Authority, less than 6 percent of renters and homeowners in the Napa area have the appropriate insurance protection.
Hartwig stated that what's all but certain is that insured and economic losses will be lower than the quake that occurred in 1994; just how much lower has yet to be determined.
"Early estimates put insured losses well under $1 billion," he said.
Major earthquakes 7 magnitude or higher
The Napa earthquake occurred at around 3:30 a.m. Pacific Standard Time on Sunday, Aug. 24. According to the U.S. Geological Survey, the last time the Napa area witnessed an earthquake registering a magnitude of at least 5.0 was in 2000.
"USGS scientists are working around the clock to understand the earthquake and relay information to emergency managers and the public," said Tom Brocher, director of USGS' earthquake science center.
He added that investigators will continue their inquiry for as long as it takes to learn more about what took place.