LOS ANGELES--(BUSINESS WIRE)--The devastating earthquake and ensuing tsunami that have hit Japan are a grim reminder that the U.S. mainland is also susceptible to quakes, according to the Insurance Information Network of California. Regions across the Pacific Rim, including California, remain on tsunami watch this morning.
Despite the state’s exposure to seismic risk, few Californians purchase earthquake insurance. Less than 12 percent of the state’s homeowners are estimated to have purchased quake policies, according to IINC.
“The potential cost of earthquakes is growing because of development in seismically active areas and the vulnerability of older buildings which may not have been built or upgraded to current building codes,” said IINC Executive Director Candysse Miller.
Earthquakes are not covered under standard U.S. homeowners or business insurance policies. Earthquake insurance is a supplemental policy to your home or business insurance. In California, homeowners can also secure coverage from the California Earthquake Authority (CEA), a privately funded, publicly managed organization.
Flood damage from a tsunami also would typically be covered under a flood insurance policy rather than a standard homeowner insurance policy. Flood policies are available from the federal government’s National Flood Insurance Program (NFIP) and some private insurance companies, and can generally be purchased from the same agent or broker who provides your homeowners or renters insurance.
Since 1900, earthquakes have occurred in 39 states and have caused damage in all 50. Just last week, a series of minor quakes rocked the state of Arkansas. There has not been a major quake on the U.S. mainland, however, since the 6.7-magnitude Northridge earthquake in 1994.
The Northridge quake and the 1989 6.9-magnitude Loma Prieta quake were the two most costly earthquakes in U.S. history, as defined by insured losses. In 2008 dollars, Northridge caused an estimated $19 billion to $29 billion in insured losses while the Loma Prieta quake resulted in insured losses totaling a little over $12 billion.
IINC is a non-profit and non-lobbying trade association dedicated to helping the public understand insurance and manage risk. For more information, please visit www.iinc.org. IINC is also on Twitter at http://www.twitter.com/iinc and on Facebook at http://companies.to/iinc.