Insured Losses from Chile Earthquake Could Top $8 Billion
Catastrophe modeling company EQECAT Inc. said insured damages from the quake could range from $3 billion to $8 billion, with economic losses ranging from $15 billion to $30 billion. Economic losses will continue to be updated as the ongoing assessment of infrastructure damage is confirmed. The company also said the speed of restoration of the transportation and utility networks will also determine the total amount of business interruption losses claimed.
Risk modeling firm AIR Worldwide estimated insured damages from the quake at $2 billion, with economic losses likely to exceed $15 billion. "The total economic loss will likely be severe from damage not only to buildings, but from the widespread impact on infrastructure, including roads, bridges, airports, and utilities and telecommunications networks," said Dr. Jayanta Guin, senior vice president of research and modeling at AIR Worldwide in a statement.
The area of Chile impacted by the quake stretches from 115 miles north of the industrial city of Concepcion to the capital of Santiago more than 325 miles away from the epicenter. More than 700 people have been confirmed killed in the devastation, but those numbers are expected to rise. AIR Worldwide estimates that the value of insurable buildings in the quake zone is $275 billion, but very few of the structures are likely to have been insured. The company said that as little as 10% of residential buildings are believed to have been insured and about 60% of the commercial structures were insured.
While older homes in many poorer towns close to the quake's epicenter were leveled, many newer structures in Santiago and Concepcion survived the quake due to Chile's stronger building codes, which were enacted because of the country's long history of devastating earthquakes. Chile was hit with the strongest earthquake ever recorded in 1960, a magnitude 9.5 tremor that unleashed tsunamis that killed 5,000 people and left 2 million homeless.