I heard about the 8.1 intensity 'quake that occurred off your coast this morning and hope that it injured no one and damaged nothing. One of my most memorable movie recollections is of the temblor in Green Dolphin Street, set in NZ. Really scary.
To the point, do your building codes require the incorporation of earthquake-resistant design and if so how recent are those requirements? Would they protect older buildings against damage? Did you feel this morning’s incident? Any damage?
And let me be the first Doper to wish all of you who celebrate it a Very Merry Christmas on this Christmas Day.
Yes, all new construction has to meet certain earthquake codes. I don’t know how long these have been in place (I’ve only been here two years). I have seen an older brick building with an exterior steel “girdle” - I’m assuming this was for earthquake resistance.
I didn’t feel the quake, but apparently they did a bit down near Invercargill. It was 820km off the coast, and 33km deep, so out there a ways.
What I want to know is - We pay a small (under $50) earthquake cover on our homeowners insurance. How likely it is that in the event of a devastating quake, the insurance company is going to be able to pay out all the claims?
Capnfutile: Thanks for the reply. And I again hope that you have avoided this morning’s 'quake and tsunamis. Are you near the coastline and if so which one?. I guess the west coast must have had some serious wave action. Really tragic about all the flooding deaths around the Indian Ocean.
As for your question, I’ve not had any experience myself with insurance claims but most big insurance companies have plenty of reserves of their own or are in “pools” with other companies to cover major calamities. They learned the need to do that from Hurricane Andrew in Florida and the more recent bunch that hit Florida this year, and Hurricane Floyd.
Maybe you’ll get some more definitive info from other Dopers. If you’re near the coast you might want to check on flood coverage but get the right type. There’s a difference, here anyways, between “rise of water” and other types of water damage. Whether a house that gets washed away by an earthquake-spawned tsunami would be covered by “earthquake” insurance or not, only your policy or agent can tell.
Now let’s hope that they don’t follow the “they come in threes” syndrome.
Ignatz, r.e. ability of insurance companies to pay off a big loss:
I used to do disaster modelling at an engineering firm for the insurance industry. A big concern with earthquakes is that unlike many other types of damage the costs are not typically spread out over the years - for example hailstorms cause damage every year, whereas big earthquakes tend to be an “all or nothing” proposition - no EQ damage for 10 years and then you get socked with a few billion dollars worth of loss. It’s easier to pay off a small loss each year than a great big one all at once.
This is what happened in California a little while ago and after the last big quake in the LA area (largest insurance loss in US history of any natural disaster, something like $30 billion) a number of firms couldn’t pay off all their claims and went bankrupt. It’s now hard to get EQ insurance in California and it’s extremely expensive; I was quoted thousands of dollars per year for my house, with a big deductible (20% or something like that).
In areas where earthquakes aren’t seen as a big threat (for example, the Midwestern US) EQ insurance is thrown in very cheaply ($50 or so, right up there with meteor strike and glacier damage coverage) and so the market penetration is enormous. The Midwest has something close to 100% EQ coverage because it is so cheap. The problem is that the area is subject to enormous earthquakes (New Madrid fault, for example) which will affect a very large area due to soil conditions (the 1811-1812 New Madrid quakes were about as strong as the 1906 SF quake and they affected about 50% of the lower 48 states). In addition seismic design isn’t really considered in residential building codes there.
The result of this situation is that eventually there will be a very intense earthquake that will affect millions of homes, all over-insured and under-built (from a seismic perspective). When that happens don’t look for the insurance companies to be able to pay off all their obligations.
This morning’s newspaper said that the recent earthquake happened exactly one year after the quake in Iran that killed 26,000 people. I hope this one has not killed that many.
15 years ago I lived in Newcastle, Australia, where there was an earthquake that caused enormous damage, because people did not expect an eathquake there, and there were a lot of buildings that were poorly designed. That included both old brick houses with weak mortar, and recent buildings that were poorly designed.
One example of a recent building that collapsed was a motel built over a car park. The car park level had pillars that supported the downward force of the building over it, but could not cope with the building being shaken from side to side> Fortunately, theat building only collapsed slowly, so no one was hurt in it, but the Newcastle Workers’ Club building, which was only a few years old, collapsed killing about a ten people.
My impression is that though it was at that time the largest ever insurance event in Australia, the insurance companies had no difficulties with it, because they were all re-insured for large-scale disasters.
Certainly, the building work that followed for several years afterwards helped the area with an “insurance-led recovery”: it’s an area dominated by the steel industry, which has been shedding labour and closing down steel mills, leading to relatively high unemployment.