Citation

Nguyen C, Noy I. Disasters 2019; ePub(ePub): ePub.

Affiliation

Victoria University of Wellington.

Copyright

(Copyright © 2019, John Wiley and Sons)

DOI

10.1111/disa.12371

PMID

31232483

Abstract

In high-income countries, where earthquake risk is perceived to be high, earthquakes are insured if and only if the public sector is involved. The proto-typical examples of this public sector involvement are the public earthquake insurance schemes in California, Japan, and New Zealand. Each of these insurance programs is structured differently, and the purpose of this paper is to examine these differences using a concrete case-study, the sequence of earthquakes that occurred in Christchurch, New Zealand, in 2011. This event was the most heavily insured earthquake event in history. We examine what would have been the outcome had the system of insurance in Christchurch been different. In particular, we focus on the California Earthquake Authority insurance program, and the Japanese Earthquake Reinsurance scheme. Overall, the aggregate cost of the earthquake to the New Zealand public insurer (the Earthquake Commission) was USD 6.2 billion. If a similar-sized disaster event had occurred in Japan and California, homeowners would have received only around USD 1.6 billion and USD 0.7 billion from the Japanese and California, respectively. We further describe the spatial and distributive patterns of these scenarios and discuss some of the policy questions that emerge from this comparison. This article is protected by copyright. All rights reserved.

This article is protected by copyright. All rights reserved.

Language: en

Keywords

California Earthquake Authority (CEA); Canterbury earthquake sequence; Earthquake Commission (EQC); Japanese Earthquake Reinsurance (JER); Public-private partnership insurance scheme; Residential earthquake insurance