Insured losses from New Zealand quake could reach $3.5bn
Insured losses from the magnitude 7.8 earthquake that struck New Zealand’s South Island on November 14 will be between NZ$1.15 billion ($762 million) and NZ$5.3 billion ($3.5 billion), according to AIR Worldwide.
It said the losses are lower because of the more rural location of much of the damage and most residential damage will be covered by the government-owned insurer, the Earthquake Commission (EQC), which is backed by NZ$4.7 billion in reinsurance.
The epicenter of the M7.8 earthquake was near the small tourist town of Kaikoura, which lies half way between Christchurch and the capital, Wellington. Kaikoura was cut off by landslides and lost its power, water supply, and sewage system.
More than 134 buildings have been inspected in Kaikoura resulting in 13 red tags denoting unsafe for use as well as 39 yellow tags denoting restricted use. About 1,200 visitors and residents have been evacuated and a local state of emergency has been declared. The seabed in the area has been raised by up to two meters in places, likely impacting the local fishing industry.
Christchurch appears to have experienced far less damage than it did in the devastating earthquakes that struck the area in late 2010 and early 2011, but has not escaped unscathed. Damage in the Canterbury area may account for up to 30% of the total losses, AIR said.
According to AIR, much of the region impacted by the November 14 event is rural and sparsely populated, but significant damage accounting for at least half of the losses from this event is reported in Wellington on the southern tip of North Island.
In Wellington some multi-story buildings experienced broken windows and contents damage, and the capital initially appeared to have escaped serious loss. Inspections, however, raised concerns about 60 or so buildings in the center. While parts of the central business district have been cordoned off because of damage to buildings, there is no “Red Zone” like the 859-day exclusion zone controversially established five years ago in Christchurch.
According to AIR, much of the central business district and waterfront of New Zealand’s capital is underlain by soft sediments, which amplify ground shaking and liquefaction damage has been reported there and on the Picton foreshore. Port operations have been suspended until further notice by CentrePort because of shake and liquefaction damage to buildings and facilities.
