Who Will Pay Expenses from Next Big Earthquake?

By Passell, Peter | THE JOURNAL RECORD, October 25, 1990 | Go to article overview

Who Will Pay Expenses from Next Big Earthquake?


Passell, Peter, THE JOURNAL RECORD


GD0;AGB;IP1,1.6;MC3;ITS;PS51,66;XP;END;

The earthquake that slammed through the San Francisco Bay area in October 1989 killed 62 people and destroyed $5 billion worth of property.

The next time the earth's giant tectonic plates slip a few yards, both people and property may be at far greater risk.

By government estimates, a quake hitting the wrong place at the wrong time of day could kill up to 95,000 and leave a $100 billion cleanup bill.

Los Angeles and San Francisco are prime targets, of course. But the peril is hardly confined to California: the Federal Emergency Management Agency believes that Seattle, Salt Lake City, Memphis and Charleston, S.C., are also at ``major'' risk.

If the Big One hits - make that ``when'' it hits - who will pay?

Even in California, relatively few property owners are covered by earthquake insurance.

But Robert E. Litan, an economist at the Brookings Institution, estimates that damage from quake-related fires and injuries could still result in up to $50 billion in insurance claims. Honoring these claims, he argues, could severely deplete insurers' reserves, driving some into bankruptcy and turning others into risk-taking zombies.

Litan's preferred fix, described in the latest edition of The Brookings Review: mandatory federal earthquake insurance, with premiums set to cover actuarial risks.

Just one California property owner in four carries earthquake insurance; nationwide, the figure is below one in 20.

If such insurance is available and most people choose not to buy it, why should the government insist?

One reason, Litan suggests, is that the private market overprices the product. Only those at greatest risk currently buy coverage, and insurers are apparently unwilling or unable to attract lower-risk customers with lower premiums.

Another reason is that owners have insufficient incentives to pay for insurance because the federal government stands ready to reimburse them for a portion of their losses.

American taxpayers, Litan reckons, shelled out $17 each for disaster relief in last year's San Francisco quake.

Uncle Sam could play hardball, giving legal notice that in the future the Treasury would help only those who help themselves.

But the threat would probably not be credible: Americans are no more likely to deny relief to uninsured victims of an earthquake than they are to deny medical care to injured motorcyclists who did not wear helmets. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Who Will Pay Expenses from Next Big Earthquake?
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.