Understanding Earthquake Insurance: Coverage, Losses, and Recovery

Economic Losses from Earthquakes

Earthquakes can cause significant economic losses, not only in terms of property damage but also in terms of business interruption and loss of life. According to the Insurance Information Institute, the 10 costliest earthquakes in US history in terms of insured losses have caused billions of dollars in damages. For example, the 1994 Northridge earthquake in California caused $15.3 billion in insured losses, making it the costliest earthquake in US history.

Measuring Earthquake Severity

Earthquake severity is measured using the Richter scale, which measures the magnitude of the earthquake. The higher the number on the Richter scale, the more severe the earthquake. For example, a magnitude 7.0 earthquake is considered a major earthquake, while a magnitude 8.0 earthquake is considered a great earthquake. The 2011 Tohoku earthquake in Japan, which had a magnitude of 9.0, is one of the most severe earthquakes in recorded history.

Recovering from an Earthquake

Recovering from an earthquake involves protecting yourself, your structure, and your financial interests. One way to protect yourself is to have an emergency plan in place, including an evacuation route and a supply of food and water. To protect your structure, you can retrofit your home to make it more earthquake-resistant. Finally, to protect your financial interests, you can purchase earthquake insurance, which can cover the cost of repairs and replacement of damaged property.