Insured losses are expected to be less than $100 million from the 5.4 magnitude earthquake that struck the Greater Los Angeles area yesterday, a reinsurance brokerage reported.
The estimate came from the Guy Carpenter Instrat unit, which said the earthquake was located three miles south-southwest of Chino Hills, at a depth of approximately 8.5 miles.
AIR Worldwide, the Boston-based catastrophe modeling firm, said based on the latest available information on the seismic parameters of the event, it does not expect "significant insured losses."
"Building codes in California are among the strictest in the world," said Mehrdad Mahdyiar, AIR earthquake hazard director. He said the company expects "minimal to no damage to engineered structures and residential wood frame from Tuesday's event. Older masonry buildings that have not undergone retrofit may sustain some minor shear cracks and damaged parapets."
Instrat said more than 4.5 million people live in areas impacted by the quake with Modified Mercalli Intensity (MMI) of VI or higher, but only minor damage was reported.
Guy Carpenter noted reports that the earthquake was the strongest to hit the region since 1987 (when a 5.9 magnitude earthquake occurred in Whittier Narrows) and was felt as far south as San Diego.
At least 50 aftershocks have hit the region, the strongest of which was 3.8 magnitude. There have been no reports of serious injuries.
According to the Insurance Information Institute, the 1994 Northridge earthquake--the last major quake to hit California--caused an insured loss of $18 billion to $28 billion in 2007 dollars.
In 1989, the Loma Prieta quake inflicted $11.7 billion in insured damage to the state in 2007 dollars, according to the Institute.
The California Earthquake Authority--the state's largest earthquake insurer--had $454.5 million in premiums written in 2006, down 9.7 percent from the year before.
The number of California homeowners who have earthquake coverage has decreased from 30 percent in 1996 to about 12 percent today, according to the Institute.
"Our sense is that the passage of time has created a situation where people don't see the need [for quake coverage," Mike Barry, a spokesman for the Institute, said in an interview a few months ago, noting that "it has been 14 years since the last big California earthquake."
Updated 11:14 a.m.
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