A worst-case, magnitude 7.9 earthquake could cause losses of more than $200 billion, according to report released today by catastrophe modeler Risk Management Solutions. The 1989 Loma Prieta event, a magnitude 6.9 quake in Bay Area, led to about $6 billion in economic damages and $960 million in insured losses.
Residential insurance penetration in the state has dropped by more than half in the 25 years since the Loma Prieta shaker, RMS said in the report. About 10 percent of California households currently have earthquake coverage, the firm said.
“When an event happens the Bay Area is going to be hindered because we don’t have that funneling of monies to help rebuild quickly,” Patricia Grossi, a senior director of model product management at RMS, said in an interview. “It’s a question of, once the dust settles, how quickly are we going to be able to rebuild?”
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