NU Online News Service, May 13, 12:18 p.m.EDT

Claims from the earthquake that shocked the Murcia region ofSpain on Wednesday will cost the state owned insurer around $100million, risk-modeling firm EQECAT says.

According to the three major catastrophe modeling firms—EQECAT,AIR Worldwide and Risk Management Solutions—losses from the quakewill be covered by Consorcio de Compensacion de Seguros, astate-guarantee insurer. Coverage for such events is mandatory inSpain, the modelers say.

EQECAT says based on current information, insured losses are notexpected to exceed $100 million, net of deductible. The coverage ismandatory for property insurance except for agricultural property,construction and erection risks, both EQECAT and AIR note.

AIR says premium for the coverage “is generated through a taxpaid by insurers and covers all direct physical losses from naturalevents deemed ‘abnormal’ by the government.”

Two earthquakes registering 5.1 and 4.5 magnitude struck thesoutheastern section of Spain in the early evening in what isconsider a highly active earthquake region. The main shock occurredat 6:47 local time, two hours after the 4.5 event. Reports vary onthe number of deaths, ranging from 8 to 10.

The most heavily impacted area was the town of Lorca where manyhistoric buildings dating back to the 16^th century wereheavily damaged.

John Alarcon, senior associate at AIR Worldwide says in astatement that the type of masonry buildings from that era has“limited ability to resist earthquake lateral loads” and sufferedcracking and wall collapse. AIR says local authorities arereporting that 80 percent of the town’s buildings were damaged.

Surrounding towns did not escape damage, AIR notes, includingTotana, Albacete and Velez-Rubio in Almeria.

The Associated Press says this is the deadliest quake to strikeSpain since 1956 when 12 people died in a quake that rocked theGranada region.