The cost of procuring earthquake insurance can be a significant one. Real estate transactions sometimes do not proceed solely due to issues relating to earthquake insurance required. These requirements may be imposed by a lender, or they may be due to internal policies implemented by entities that own real estate. Earthquake insurance premiums are often tied to the results of a seismic risk assessment, where a Scenario Expected Loss (SEL) and/or a Scenario Upper Loss (SUL) is provided. There is very good news that recent developments in the seismology community may allow SEL and SUL values to decrease, with no other change to the building, which consequently would reduce the cost of the insurance premiums.
The United States Geological Survey (USGS) has periodically provided National Seismic Hazards Maps that provide ground accelerations using specific earthquake scenarios. These maps are used by structural engineers to assist in defining the intensity of earthquake shaking for the structures they are designing or analyzing. The first of these maps was published in 1996, with updates in 2002 and 2008.
Marx Okubo is a national architecture/engineering/construction consulting firm that works with real estate owners, investors and lenders—at every point of the property lifecycle—to evaluate their building projects, solve complex challenges and implement tailored solutions. We help clients understand their projects’ complexities, so they can make more informed decisions and, ultimately, mitigate their risk.
