Much of the world, even country’s prone to seismic events, is dangerously under insured for earthquakes, a new Swiss Re paper has revealed.
Despite last year bringing with it a number of large and destructive tremors, the report found that low risk awareness was driving under insurance in earthquake-prone areas.
The report, ‘Lessons from recent major earthquakes’, stressed the importance in being insured, especially for those living in earthquake-prone areas. “The insurance industry is playing a key role in post-disaster financing of the countries affected. While insurance cannot replace lost lives and livelihoods, appropriate insurance and other risk transfer mechanisms can greatly accelerate the recovery process.” said Lucia Bevere, Senior Catastrophe Data Analyst at Swiss Re Economic Research & Consulting and co-author of the publication.
The study revealed a stark spread in the amount of cover for different countries. For example, last years Feburary earthquake in New Zealand will be around 80% covered by insurance, but only 17% of the cost of the earthquake disaster in Japan covered by insurance. In Haiti only 1% of their 2010 quake was covered by insurance. Without insurance coverage, post-disaster reparations come from government funds and ultimately must be borne by taxpayers.
Bevere attends this lack of coverage to low risk perception. “The low frequency of earthquake events, compared to other natural catastrophes, tends to shape the perception that earthquake risk is much lower than it actually is, even in places where there have been very deadly and damaging occurrences, like California.”