Damage from New Zealand quake could reach $4.5 billion

A Magnitude 7 earthquake rocked the New Zealand city of Christchurch on Sept. 4, causing estimated damages between $2 billion and $4.5 billion.
New Zealand’s Institute of Geological and Nuclear Sciences (GNS Science) reported that the quake occurred at a shallow depth of five kilometres on a previously unknown fault that appears to have not ruptured for at least 16,000 years.
All residential property owners who buy fire insurance automatically acquire cover from the New Zealand Earthquake Commission, RMS reports.
The EQ commission has a $4-billion (NZ$5.5-billion) natural disaster fund and an international reinsurance program. Commercial and industrial losses will likely be less than half the total loss, RMS added.
The quake is likely to trigger approximately 100,000 residential claims that could cost between $720 million (NZ$1 billion) and $1.4 billion (NZ$2 billion), Guy Carpenter reported.
According to AIR, while design requirements for new construction in New Zealand are quite stringent, Christchurch – the country’s oldest city – has many historical masonry buildings in its central business district, few of which have undergone seismic retrofit.
“Whole sections of walls fell away from buildings’ frames and chimneys and parapets toppled,” AIR said in a release. “It is likely that many older masonry buildings – even those in which damage is not immediately apparent – will have sustained cracks that compromise structural integrity.”
Significant damage to residential structures, including collapses nearer the epicentre, seem to have been the result of toppled chimneys smashing roofs and the contents beneath, the release added.