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The 10 costliest earthquakes and tsunamis by insured losses

April 4, 2014  

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The 8.2-magnitude earthquake that struck off the coast of northern Chile on April 1, and resulted in tsunami advisories as far away as Hawaii, highlights North America’s vulnerability to temblors and quake-caused tsunamis, according to the Insurance Information Institute (I.I.I.).

Chile was also the site of the largest earthquake ever recorded in May 1960, when a deadly 9.5-magnitude quake and resulting tsunami caused approximately 1,655 fatalities and millions of dollars of damage in Chile, Hawaii, Japan and the Philippines, the United States Geological Survey (USGS) reports.

Read: 50th anniversary of Great Alaskan Earthquake a reminder of quake threat

In addition, a February 2010 Chilean earthquake caused $8 billion in insured losses when it occurred, equal to about $8.6 billion in 2013 dollars, making it the fourth costliest earthquake and 13th most expensive natural disaster in history, according to the Insurance Information Institute and Munich Re.

This week’s earthquake in Chile comes on the heels of a magnitude 5.1 temblor on March 28 that caused modest damage outside of Los Angeles.

“Four of the five costliest earthquakes in the past three decades have occurred since 2010,” said Dr. Robert Hartwig, president of the I.I.I. and an economist. “The Japanese earthquake and tsunami in March 2011 remains the costliest disaster of this type in recent history, having generated $40 billion in insured losses at the time it occurred.”

Read: Quake complacency costs

Besides Chile and Japan, New Zealand has over the past four years been the site of two significant earthquakes, one in September 2010 and the other in February 2011. Together, the New Zealand quakes resulted in $20.5 billion in insurance claims payouts.

The earthquake that struck Northridge, California, in January 1994 is second only to the March 2011 Japan quake on the list of costliest earthquakes worldwide dating back to 1980, having caused $15.3 billion in insured losses at the time, a number equivalent to nearly $24 billion in 2013 dollars.

The greatest loss of life due to earthquakes occurred in Haiti in January 2010 and in Indonesia, Sri Lanka, Thailand, and other Indian Ocean coastal nations in December 2004, with more than 200,000 fatalities in both instances.

Read: Earthquakes’ sound waves could warn of approaching tsunami

NOAA has made significant upgrades to the U.S. tsunami warning system since 2004. The federal government announced in 2008 that NOAA now had 39 stations providing coastal communities in the Pacific, Atlantic, Caribbean and Gulf of Mexico with faster and more accurate, tsunami warnings.

Meanwhile, two dozen U.S. lawmakers from West Coast states are calling for funding of an earthquake warning system designed to give residents a few seconds of notice of imminent shaking after a quake occurs.

An alert system exists in Japan, Mexico and several other quake-prone countries.

Representatives of California, Washington and Oregon sent a letter Thursday to the Appropriations Committee calling for $16 million a year to build, operate and maintain an alert system.

The U.S. Geological Survey has partnered with three universities to test a prototype warning system. The system can’t predict earthquakes and people at the epicenter won’t get any warning, but those farther away could benefit.

With files from the Associated Press 

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This story was originally published by Canadian Insurance Top Broker.