Insurance: Earthquake Risk Spotlight on the U.S

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Location Matters: A Cross-Country View

From businesses and corporations to the average person on the street, most people don’t think of natural hazard risk on a daily basis. Recently, major catastrophic floods and wildfires have made headlines, and the Midwest fears and plans for tornado season every year, while the East Coast prepares for hurricane season each summer. But what about earthquakes? Any time there’s a small shake near a bigger city people take note, but it’s been more than 20 years since the U.S. has experienced a major damaging earthquake with the magnitude (M) 6.7 Northridge earthquake in California in 19941. There have been a few moderate reminders across the country, like the M5.8 earthquake in August 2011 in Virginia2, which was felt across much of the eastern half of the U.S., and the M6.0 earthquake near Napa, California in August 20143 that caused some structural damage and impacted the wine industry. However, none of these earthquakes have had the wide-spread catastrophic impact that previous historical earthquake events have, including the 1906 San Francisco4 or the 1811-1812 New Madrid5 earthquakes. Yet the potential is real and increasing daily.

Globally, the United States Geological Survey (USGS) identifies approximately 50 earthquakes each day, or about 20,000 a year6. Fortunately,only a small number of these events each year will cause any significant damage, but the risk of a major damaging earthquake in the U.S. should be a growing concern.

People usually think of California when they think of earthquake risk. This is because, historically, California has had the highest seismic hazard7 and has also been the most seismically active region in the U.S., with the greatest history of damaging earthquakes, including the 1989 M6.9 Loma Prieta earthquake8. This event caused significant damage in the San Francisco Bay Area and collapsed part of the Bay Bridge that connects Oakland and San Francisco. As previously mentioned, there was also the 1994 M6.7 Northridge earthquake, which held the record for the most costly natural disaster in U.S. history9 until Hurricane Katrina in 2005. Going back further in history, there is a long record of large magnitude earthquakes in California: The 1906 M7.8 San Francisco4 earthquake, the 1868 M6.8 Hayward Fault10 earthquake and the 1857 M7.9 Fort Tejon11 earthquake. Due to the high seismic hazard and increased exposure in California (Los Angeles is the second largest city in the U.S.12 and the San Francisco Bay Area-San Francisco, Oakland and San Jose-is the sixth largest metropolitan) California remains the highest at-risk region in the country13.

Earthquake risk in the U.S., however, extends far beyond California, stretching much farther northward. For example, the Pacific Northwest has a long history of damaging earthquakes, and the potential of a catastrophic M9.0 earthquake and tsunami along the Cascadia subduction zone14-similar to that which devastated Japan in 2011-is very likely. The Intermountain West region, which includes a region of seismicity along the Wasatch Fault15 in Utah and Idaho and is in close proximity to Salt Lake City, is also earthquake prone. In the Midwest, the New Madrid region has a shaky history, including a series of earthquakes in the M7-8 range in 1811 and 18125. The New Madrid seismic zone encompasses Missouri, Illinois, Indiana, Kentucky, Tennessee, Alabama, Mississippi and Arkansas, with the cities of Memphis and St. Louis being closest to the fault ruptures that occurred in 1811 and 1812. The Northeast has a lower exposure to earthquake risk, but is still not completely safe, mostly because of the seismic zone along the St. Lawrence River basin in southeastern Canada. In the Southeast, Charleston, South Carolina experienced a devastating M7.0 earthquake in 188616.

Another region that has gained significant attention in recent years due to earthquake activity is the central U.S., especially Oklahoma, northern Texas and southern Kansas. A recent study by the USGS indicates there are increasingly more earthquakes in Oklahoma than there are in California17. The rapid increase of earthquakes in Oklahoma and surrounding areas is highly correlated with oil and gas exploration, specifically the injection of waste fluid, a byproduct of the hydraulic fracturing process.

It has been difficult to quantify this new hazard trend since it is rapidly changing with an increased number of earthquakes year over year, which does not fit with the historical record. As such, the USGS has developed an independent, short-term view of earthquake hazard, specifically related to man-made or induced seismic activity. With this new study, the perception exists that the hazard in Oklahoma is the highest in the nation. However, it is important to understand that the exposure to this hazard and the history of large damaging earthquakes is far less than that in California. As such, California remains the top-ranked state for overall earthquake risk.

In a series of blogs focusing on earthquake risk, CoreLogic will investigate recent developments in seismic hazard science and how it is transforming the way we manage earthquake risk, beginning with California and then exploring the regions of the Pacific Northwest, New Madrid and the emerging risk in Oklahoma.



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