Only one in 20 residents in Napa County had earthquake insurance when the strongest earthquake to strike the San Francisco Bay Area in 25 years was recorded on the morning of August 24.
This is according to Impact Forecasting, the catastrophe model development centre of Aon Benfield.
Nap County has a low residential earthquake insurance penetration rate of 5.3 percent, compared to the average of 10 percent seen in surrounding areas.
Total economic losses from the event were expected to breach $2 billion, with insured losses likely to be in the hundreds of millions of dollars due to the low residential earthquake insurance penetration, said Impact Forecasting.
Meanwhile, a USGS-registered magnitude-6.1 earthquake struck Yunnan Province in southwest China on August 3, killing at least 617 people and injuring more than 3,143 others. Total economic losses were forecast to be at least Rmb38.5 billion ($6.3 billion).
Earthquake events were also recorded in Peru, Ecuador, Iran, Algeria, and South Africa during August.
Steve Bowen, associate director and meteorologist within Aon Benfield’s Impact Forecasting team, said: “Despite the upcoming historical peaks of the Atlantic and Pacific tropical cyclone seasons, earthquakes were the primary focus during the month of August; especially following the magnitude-6.0 event in Northern California’s Bay Area.
“Residential earthquake insurance penetration rates have gradually lowered in California during the past two decades from 33 percent in 1996 to roughly 10 percent today, and the August 24 Napa County event serves as a reminder of the unpredictability and costly impacts of the peril.
“While not expected to be as costly to insurers as the Northridge event in 1994, and possibly Loma Prieta in 1989, the Napa event proves the need of consistently analysing the risks associated with US earthquakes through such avenues as catastrophe modelling.”
Impact Forecasting, Aon Benfield, Earthquake, Steve Bowen, North America