Earthquakes: Risk and Insurance Issues

An earthquake is a sudden and rapid shaking of the earth caused by the breaking and shifting of rock beneath the earth’s surface. This shaking can sometimes trigger landslides, avalanches, flash floods, fires, and tsunamis. Unlike other natural disasters such as hurricanes, there are no specific seasons for earthquakes. In the United States about 5,000 quakes can be felt each year. Since 1900, earthquakes have occurred in 39 states and caused damage in all 50. One of the worst catastrophes in U.S. history, the San Francisco Earthquake of 1906, caused direct quake losses of about $24 million and fire losses of about $500 million, according to the National Geophysical Data Center. That would be about $10 billion in 2002 dollars, a small portion of the potential cost of damage from a similar earthquake today.