California is still vulnerable to devastating loss should another earthquake occur like the Loma Prieta earthquake, which occured 20 years ago, according to ProtectingAmerican.org.
“The fact is, that California’s largest cities are economically vulnerable as they were when the Loma Prieta Earthquake struck in 1989, when the Northridge Earthquake struck in 1994, or when the Great San Francisco earthquake struck in 1906,” said James Lee Witt, co-chair of ProtectingAmerica.org and former director of the Federal Emergency Management Agency under President Clinton, in a press release.
“It is easy to get lulled into believing that, ‘it can’t happen here,’ but earthquakes have happened throughout California, and they will happen again,” he said.
“The potential economic impact would be devastating,” he added.
The press release noted that a a recent analysis by Risk Management Solutions said that a 6.7 magnitude earthquake on the Hayward fault could result in $112-to-$122 billion in economic losses. A magnitude 7.0 quake along the length of the Hayward fault would result in $210-to-$235 billion in economic losses.
“Clearly, we can’t control Mother Nature, but we can and should do something to improve awareness and to take action on the potential exposure to catastrophic events,” Lee said.
“We should do what we can to take some of the costs out of the insurance system and make homeowners insurance more affordable and accessible to California residents. There is no question that enacting legislation currently pending before Congress and supported by President Obama could provide substantial and permanent savings to the state’s homeowners,” he added.
That legislation, the Homeowners’ Defense Act, could save Californians a total of $3.28 billion, or $256 per household, by creating a private-public backstop to stand behind the traditional insurance market and cover truly catastrophic events, the release said.
A national catastrophe fund that would be accessible only to states that choose to participate would minimize the taxpayer bailouts that follow every major catastrophe and the likelihood that residents of low risk states would be called upon to cover losses in high risk states, the release added.