The California Earthquake Authority gained 23,861 earthquake insurance policies following the magnitude 6.4 and 7.1 earthquakes and aftershocks that struck on unnamed faults near Ridgecrest beginning on the July 4 holiday.
That’s the second-largest monthly net increase in the 23-year history of the CEA, a not-for-profit, privately funded, publicly managed organization.
The gain in policies seen after what geologists are calling the Searles Valley earthquake sequence is a net gain that takes into account new purchases and policies renewed during July, less any canceled policies during the month, according to CEA.
The gains weren’t unexpected. CEA CEO Glenn Pomeroy said in July that hits on the authority’s website were 10 times normal.
The number of policies gained far outpaces normal gains for CEA. The authority, for example, gained a 6,289 policies for the first six months of 2019 combined.
The July numbers brought CEA’s total policy count to 1.08 million as of the end of July.
CEA’s largest monthly gain was in September 2017, following hurricanes in the Southeastern U.S. and the Caribbean, earthquakes in Mexico and wildfires in California, when CEA had an increase of nearly 26,000 policies.
“Large, damaging earthquakes like the ones that recently struck Ridgecrest don’t happen very often,” Pomeroy said in a statement. “But when they do, they’re a powerful reminder that earthquakes can happen at any time, anywhere in California, and that we need to get better prepared to recover. If the Ridgecrest earthquakes had occurred under a more densely populated area, such as Los Angeles, the outcome could have been a lot worse for California.”
California’s earthquake insurance market share is dominated by the CEA (41.2 percent) followed by Zurich (8.7 percent) and Chubb (5.3 percent), according to Morgan Stanley Research.
CEA has roughly 2,000 policyholders in the Ridgecrest area who likely experienced strong to severe shaking, tough the authority says it is still tallying losses. As of Aug. 26, the CEA had received reports of 462 damage claims from its participating residential insurance companies.
Earthquake insurance take-up rates are low in California, typically hovering at just above 11 percent of homeowners buying coverage. However, the take-up rate in Ridgecrest is 20 percent, according to the CEA.
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