Facts + Statistics: Earthquakes and tsunamis

World

2021 Earthquakes: On February 13 a 7.1 magnitude earthquake struck off the coast of Japan’s Fukushima Prefecture near the area of the devastating 2011 quake. According to Aon as many as 4,700 residential structures were damaged or destroyed. Total economic losses were expected to reach into the hundreds of millions of dollars.

2020 Earthquakes: Croatia experienced the strongest earthquake in 140 years on December 29, a 6.4 magnitude quake 50 km southeast of the capital, Zagreb. The Economic Ministry of Croatia estimated that insured losses would be about $63.5 million, a tiny fraction of the $13.7 billion in total losses. In March, an earthquake with a magnitude of 5.3 struck the region north of Zagreb, causing property losses of $1.8 billion according to Munich Re.

In the United States, on January 7, a 6.5-magnitude earthquake struck southwest Puerto Rico, which lies in a tectonically active region. The island had not had a quake of this level since 1918. The 2020 quake caused widespread damage to infrastructure in a region that is still recovering from the effects of 2017’s Hurricane Maria.

2019 Earthquakes: In the United States, the sparsely populated Ridgecrest City section of California was struck by a pair of significant earthquakes in 2019. On July 4 a 6.4-magnitude “foreshock” earthquake hit the area, followed by a stronger 7.1-magnitude quake the following day, along with a number of aftershocks. The 7.1 quake was the largest to hit the state in 20 years. According to Karen Clark and Co., insured losses from the quakes are estimated to total less than $40 million.

2018 Earthquakes: On September 5 an earthquake struck Hokkaido, Japan which left dozens dead and caused more than $1.7 billion in damage, according to Aon. On June 17 another strong earthquake impacted Osaka Japan, resulting in insured losses of at least $935 million.

In the United States, a magnitude 7.0 tremor struck near Anchorage, Alaska on November 30. losses totaled more than $150 million.

2011 Earthquakes: On March 11, 2011 a devastating tsunami hit the coast of northeast Japan, triggered by a powerful earthquake approximately 80 miles offshore. The quake and tsunami caused $40 billion in insured damages when it occurred ($46 billion in 2020 dollars), according to Munich Re. Also, in February 2011 a powerful earthquake struck Christchurch, New Zealand, resulting in $16.5 billion in insured damages when it occurred ($19 billion in 2020 dollars) . The Japan and New Zealand quakes are among the 10 costliest world earthquakes and tsunamis, based on insured damages, according to Munich Re (see table).

United States

The 1994 Northridge quake was the costliest U.S. earthquake on record, causing $15.3 billion in insured damages when it occurred ($28.4 billion in 2021 dollars) according to Aon. The Northridge quake ranks as the eighth costliest U.S. disaster, based on insured property losses (in 2021 dollars). Six of the costliest U.S. quakes, based on inflation-adjusted insured losses, were in California.

Top 10 Costliest U.S. Earthquakes By Inflation-Adjusted Insured Losses (1)

($ millions)

        Insured losses (1)
Rank Date Event Location When occurred In 2021 dollars (2)
1 Jan. 17, 1994 Northridge CA $15,300 $28,357
2 Apr. 18, 1906 San Francisco CA 235 7,303
3 Oct. 18, 1989 Loma Prieta CA 960 2,071
4 Feb. 28, 2001 Nisqually WA 315 486
5 Jan. 7, 2020 Puerto Rico PR 425 446
6 Aug. 24, 2014 South Napa CA 200 228
7 Feb. 9, 1971 San Fernando CA 32 215
8 Oct. 1, 1987 Whittier Narrows CA 75 176
9 Nov. 30, 2018 Anchorage AK 150 161
10 Aug. 23, 2011 Virginia VA, DC 100 120

(1) Includes losses sustained by private insurers and government-sponsored programs such as the National Flood Insurance Program. Ranked on losses in 2021 dollars. Subject to change as loss estimates are further developed. As of February 1, 2022.
(2) Adjusted for inflation by Aon using the U.S. Consumer Price Index.

Source: Aon.

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Top 10 Writers Of Earthquake Insurance By Direct Premiums Written, 2020

($000)

Rank Group/company Direct premiums written (1) Market share (2)
1 California Earthquake Authority $843,756 19.8%
2 FM Global  341,855 8.0
3 Zurich Insurance Group 284,421 6.7
4 State Farm 284,085 6.7
5 Chubb Ltd. 187,598 4.4
6 Palomar Specialty Insurance Co. 183,302 4.3
7 Travelers Companies Inc. 156,662 3.7
8 American International Group (AIG) 141,374 3.3
9 Sompo Holdings Inc. 122,128 2.9
10 AXA SA  119,627 2.8

(1) Before reinsurance transactions, includes state funds.
(2) Based on U.S. total, includes territories.

Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.

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Earthquake insurance

Standard homeowners, renters and business insurance policies do not cover damage from earthquakes. Coverage is available either in the form of an endorsement or as a separate policy. Earthquake insurance provides protection from the shaking and cracking that can destroy buildings and personal possessions. Coverage for other kinds of damage that may result from earthquakes, such as fire and water damage due to burst gas and water pipes, is provided by standard home and business insurance policies. Earthquake coverage is available mostly from private insurance companies. In California homeowners can also get coverage from the California Earthquake Authority (CEA), a privately funded, publicly managed organization. Only about 14 percent of California homeowners had earthquake coverage in July 2020, according to the CEA.

Twenty-three percent of homeowners who had homeowners insurance responding to the 2020 Triple-I Consumer Poll said they had earthquake insurance, up from 15 percent in 2018. Homeowners in the West were most likely to have earthquake insurance, with 28 percent saying they had the coverage, followed by the South at 25 percent; the Northeast at 21 percent; and the Midwest at 16 percent. See the Poll report for details.

Earthquake Insurance, Direct Premiums Written by State, 2019 (1)

($000)

Rank State Direct premiums written ($000)
1 California $2,072,849
2 Washington 239,773
3 Oregon 106,635
4 Missouri 101,823
5 Tennessee 87,637
6 Illinois 76,216
7 New York 61,995
8 Utah 60,615
9 Kentucky 53,831
10 South Carolina 49,122
11 Texas 42,189
12 Indiana 40,857
13 Ohio 36,051
14 Arkansas 35,813
15 Massachusetts 31,103
16 Alaska 30,264
17 Nevada 26,931
18 Florida 26,340
19 Virginia 24,955
20 New Jersey 23,199
21 Pennsylvania 19,807
22 Oklahoma 18,976
23 Georgia 18,427
24 Mississippi 16,687
25 Maryland 14,121
26 Colorado 13,839
27 North Carolina 13,738
28 Hawaii 13,296
29 Arizona 12,342
30 Alabama 10,014
31 Michigan 8,618
32 Connecticut 8,207
33 Kansas 8,029
34 Montana 6,922
35 Minnesota 6,293
36 Louisiana 5,572
37 Iowa 5,212
38 Wisconsin 5,189
39 Idaho 4,437
40 Wyoming 4,215
41 D.C. 4,143
42 New Mexico 3,507
43 New Hampshire 3,262
44 Rhode Island 2,356
45 Nebraska 2,267
46 Maine 1,884
47 West Virginia 1,321
48 Delaware 1,297
49 Vermont 1,197
50 North Dakota 1,046
51 South Dakota 491
  United States $3,464,910

(1) Includes the California Earthquake Authority, a state fund.

Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.

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  • Earthquake insurance direct premiums written rose 12.9 percent to $3.5 billion in 2019 from $3.1 billion in 2018.
  • California had the largest amount of earthquake premiums in 2019, at $2.1 billion, accounting for 59.8 percent of U.S. earthquake insurance premiums written. This figure includes the state-run California Earthquake Authority, the largest provider of earthquake insurance in California. The next highest ranking states were Washington state (6.9 percent of premiums) and Oregon (3.1 percent) Missouri (2.9 percent) and Tennessee (2.5 percent).

Earthquake Insurance, 2012-2021

($000)

Year Net premiums
written (1)
Annual percent
change
Combined
ratio (2)
Annual point
change (3)
2012 $1,593,451 8.6% 36.3 -19.5 pts.
2013 1,586,985 -0.4 30.3 -6.0
2014 1,641,847 3.5 34.0 3.7
2015 1,649,753 0.5 28.1 -5.8
2016 1,535,142 -6.9 34.4 6.2
2017 1,511,543 -1.5 42.3 8.0
2018 1,827,543 20.9 44.3 2.0
2019 1,985,433 8.6 29.0 -15.3
2020 2,386,798 20.2 38.1 9.1
2021 2,824,051 18.3 36.1 -2.0

(1) After reinsurance transactions, excludes state funds, such as the California Earthquake Authority, a not-for-profit, privately funded, publicly managed organization that provides coverage in California.
(2) After dividends to policyholders. A drop in the combined ratio represents an improvement; an increase represents a deterioration.
(3) Calculated from unrounded numbers.

Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.

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