New earthquake fault lines have been discovered on the WestCoast, including in Los Angeles and Spokane, Wash., but it is yetunclear how this may affect home development or insurance rates inthe at-risk areas.

In California, state geologists revealed two maps of activefaults running through several Los Angeles neighborhoods. One is ofthe Hollywood Fault, a 10-mile long fracture the Wall StreetJournal reports may produce a 7.0 magnitude quake strong enough torupture the earth.

It splinters right below the site of Millennium Hollywood, aproposed $664 million residential and commercial development inhalted development (the 1972 Alquist-Prolio Act prohibits buildingabove active earthquake faults). Luke Zamperini, the city's chiefbuilding and safety inspector, said all planned projects in theneighborhood would have to be re-evaluated under a fault-rupturestudy.

“It's not uncommon for new fault lines to be discovered,” saysChris Hackett, director of personal-lines policies for the PropertyCasualty Insurers Association of America (PCIAA). “The 1994Northridge Earthquake occurred on a fault line that was previouslyunknown to scientists.

“Claims activity pertains more to a specific building orlocation, including construction type and replacement costs of thehouse, as well as contents coverage or additional living expenses(ALE).”

Earthquake insurance is typically excluded under standardhomeowners policies; most buyers in high-risk states in the PacificNorthwest purchase it as endorsement, and in California, from theCalifornia Earthquake Authority (CEA).

The CEA works with 20 participating earthquake-ready insurers,covering 75% of the approximately 10% of Californians who haveearthquake insurance.

“The discovery of fault lines would affect rates greatly if itcaused a location to be considered a higher-risk area,” says GinaPlessas, customer service representative for the CEA. “Theywouldn't go up everywhere, but more details would depend on therate filings of the California Department of Insurance.”

Swiss Re data ranks Los Angeles and San Francisco as two of theglobal cities most in danger from a seismic event. Adjusted toinflation, the 296-mile long scar of the 1906 San Franciscoearthquake would cost up to $60 billion if it occurred today,according to Fireman's Fund.

Further north, an airborne magnetic overview by the UnitedStates Geological Survey (USGS) showed potential danger nearSpokane, Wash. Caused by the known Cheney fault zone and a second,previously unrecognized zone of faults and fractures, and combinedwith the Latah Creek fault, the USGS calls this hotspot a “complexalignment of magnetic anomalies.”

One fault crosses Spokane in a northeast direction, passingthrough a zone where 105 magnitude 4.0-or-below earthquakesoccurred in 2001. The USGS plans to investigate further for thecause of the quakes.

“There are many geologic reasons for linear magnetic anomalies,and the presence of unrecognized faults is just one possibility,”says the USGS.

Last year, two Los Angeles City Councilmembers called for astatewide ballot that provides funding to cities to retrofit oldbuildings with “soft” ground floors, or those made withconcrete.