In April 2018, CoreLogic published a report that examined the findings of the U.S. Geological Survey’s (USGS) HayWired Scenario and uncovered some startling findings about how underinsured the average American is in the event of an earthquake in the populated area.
The HayWired Scenario describes a hypothetical magnitude 7.0 earthquake and 16 magnitude 5.0 aftershocks along the Hayward Fault, which is located beneath the densely populated and economically vital communities of the San Francisco East Bay area.
Should this situation occur, CoreLogic estimates that damage to private property would total $170 billion, with insurance payments to property owners estimated at approximately $30 billion – less than 20% of the overall damage.
The reason? Low purchase rates of earthquake insurance.
“From a buyer’s perspective, there is a lack of urgency,” says Tom Larsen, principal, industry solutions for CoreLogic. Additionally, “people think it’s expensive. But I don’t think it is if people look at it from the right perspective.”
Consider that the 1994 Northridge quake, whose epicenter was in the San Fernando Valley region of Los Angeles, caused $15.3 billion in insured damages, according to CoreLogic. It ranks as the fifth-costliest U.S. disaster, topped only by Hurricane Katrina, the attacks on the World Trade Center, Hurricane Andrew and Superstorm Sandy.
And in July 2014, when the USGS Survey updated its U.S. National Seismic Hazard Maps for the first time since 2008, it discovered a 70% probability that an earthquake of magnitude 6.7 or larger will strike the San Francisco Bay area in the next 30 years.
The findings further revealed that 42 states are at risk of an earthquake, and that the 16 states that have experienced a magnitude 6 earthquake or greater in the past are considered at high risk.
From the Woodstock Fault in the Carolinas to the New Madrid Fault in southern Missouri, “ground motions go over vast areas. What that means is that the damage would be very, very broad form a large earthquake,” Larsen explains. “You can’t predict where this is going to occur, but that risk is pretty much everywhere in the U.S.”
“With the science of earthquakes, the gap in time since the last one increases the forecast that an earthquake is more likely to occur in the future,” Larsen adds. “It’s not definite, but it’s becoming more unavoidable in our planning horizon.”
Article by: Will Jones
Source: iamagazine.com
