NU Online News Service, Oct. 25, 2:58 p.m. EDT
Despite the devastation and billions of dollars in economic damage that Turkey has suffered from Sunday’s 7.2 magnitude earthquake, the insurance industry’s burden should be minimal with one loss estimate at up to $200 million.
Eqecat issued a report late yesterday estimating that insurance losses from the earthquake could range from $100 to $200 million. Total economic damage is put in “low single-digit billions.”
The economic damage is about “one-tenth that from the 1999 magnitude 7.6 Izmit earthquake in western Turkey and 10 times the damage from the 2010 magnitude 6.1 earthquake in eastern Turkey,” says Eqecat.
Eqecat notes that residential buildings throughout the eastern part of the nation are not constructed to withstand earthquakes.
Insurance losses are to be assumed by the Turkish Catastrophe Insurance Pool, a national compulsory earthquake insurance for residential buildings. The program was initiated in 2000 to minimize the rebuilding cost to the central government. It is backed primarily by international reinsurers, Eqecat says. Limits per policy are approximately $30,000 with 2 percent deductible.
TCIP penetration is somewhere around 20 percent, Eqecat estimates, and take-up in the east, where the earthquake occurred, is less than the national average.
The modeler says that its insured-loss estimate is based on damage to residential buildings.
The earthquake region, centered 9 miles West-Northwest of Van, Turkey, has suffered hundreds of aftershocks.
ABC News reports the death count is nearing 400 and more than 1,300 injured. A two week old infant and mother were rescued 47 hours after the earthquake as rescue workers race to save as many as they can.