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Analysis of Residential Claims From the Northridge Earthquake

Delve into the 1996 study on zip code insurance losses, claim rates, and predictive factors post-Northridge earthquake. Explore correlations between variables and mitigation strategies for residential recovery.

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Analysis of Residential Claims From the Northridge Earthquake

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  1. Analysis of Residential Claims From the Northridge Earthquake Mary C. Comerio and John D. Landis for California Earthquake Authority

  2. 1996 Residential Recovery Study • Zip code average insurance losses • Zip code loss shares • Claims by zip code • Structural damage loss ratios by zip code • Contents damage loss ratios by zip code

  3. 1996 Independent Variables • Distance to the fault rupture plane • Average peak ground acceleration • Age of the structure • Economic value of the housing • Number of policy holders and amount of coverage

  4. 1996 Study Results • POSITIVE Relation with Zip Code Losses • Average peak ground acceleration • Total number of policies • NEGATIVE Relation with Zip Code Losses • Age of stock (i.e. housing built pre-1950) • TECHNICALLY POSSIBLE TO PREDICT CLAIM RATES

  5. PROPOSED CEA RESEARCH METHODS • Sample 10% of policies with claims and policies without claims in zip codes with >100 claims after Northridge • Location • Coverage • Building Conditions • Claim Amount and Damage

  6. 1. Probability of Making a Claim • Probability [policy holder i submitted claim] = f (distance of house to fault-rupture line; peak and average ground acceleration; soil conditions; deductible amount; policy type and coverage; home age; building type; design characteristics and condition; level and type of mitigation)

  7. 2. Estimating the Structural Damage Claim Amount • Amount of Claim for Structural Damage = f (distance of house to fault-rupture line; peak and average ground acceleration; underlying soils conditions; policy type and coverage; home age; building type; design characteristics and condition; level and type of mitigation)

  8. Summary of Research Tasks • Map claim and non-claim policy holders in a GIS format • Overlay with CDMG soil conditions • Prepare a 2 stage logit and regression analysis of sub-system losses against relevant independent variables • Analyze loss-reduction effects of mitigation if correlation exists

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