North America Recalls 20-Year Anniversary of Northridge Earthquake
Friday, January 17, 2014
Albertans today, particularly those who are new to the province, may have once lived in California or some other part of the Western U.S. It's along this region of the continent that many fault lines sit, making it more likely for earthquakes to take place here when compared with other parts of North America.
With this in mind, former California and current Alberta residents may recall that January marks the 20th anniversary of the Northridge earthquake. On Jan. 17, 1994, a 6.7-magnitude earthquake struck the Golden State, centered in the San Fernando Valley portion of Los Angeles. According to industry organization Insurance Information Institute, insured losses - including home insurance - exceeded $15 billion, making it the U.S.' costliest earthquake disaster on record. Adjusting for inflation, that's the equivalent of about $24 billion were the temblor to have occurred in 2013.
"Insurers paid out more for Northridge claims than they had collected in earthquake insurance premiums in the preceding 30 years," said Robert Hartwig, president of the III.
Perhaps because a major earthquake hasn't occurred in more than two decades in the U.S., few people have the necessary coverage, which is not a standard part of most property insurance plans either in Canada or the U.S. A poll performed by III revealed that one in 10 American homeowners has an earthquake policy, down from 13 percent in 2012.
Even in California, the state where most earthquakes have occurred, ownership isn't very high. Pete Moraga of the Insurance Information Network of California indicated that just over 10.5 percent of homeowners in the state have a plan in place, III reported.
Canada's not prepared for earthquake
While these numbers may suggest that a large number of Americans aren't sufficiently prepared for an earthquake and the recovery process that's involved, many Canadians haven't been especially proactive with their readiness either. Catastrophe modeling firm AIR Worldwide recently revealed that Canada as a whole does not have the systems in place to ease the blow an earthquake would likely cause to wherever it hit.
Don Forgeron, president and CEO of the Insurance Bureau of Canada, noted at the time that the report's conclusions were sobering and ought to serve as a motivation for action.
"The findings will help us raise awareness of the need to plan for, and mitigate the risks of a major earthquake," said Forgeron. "The study is a valuable tool and will be shared with governments, regulators, disaster preparedness organizations, the banking community, the insurance industry, and the public."
Depending on where the earthquake struck, economic and insured losses would likely vary. For example, the report revealed that if a 9.0-magnitude earthquake hit a western province, like Alberta or British Columbia, losses could exceed $75 billion. Meanwhile, a less powerful 7.1-magnitude quake that hit Quebec could bring damage totals of about $61 billion.
If Alberta residents don't have an earthquake policy in place, they might consider speaking with their insurance representative to find out more about the plans and how they'll affect their premiums.