Risk Management Solutions (RMS) has said a Mw7.9 earthquake on the northern section of the San Andreas Fault today would result in at least $260bn of damages to residential and commercial exposures.
RMS said $50bn-$80bn of this would be covered by property and workers compensation insurers.
The company announced the findings as the results of a study analyzing the impacts of the 1906 San Francisco Earthquake and Fire based on the 2006 population and property exposures of the San Francisco Bay Area.
In contrast to the 1906 event, where 80% of the losses were caused by fire, less than 15% of the estimated total insured property losses are expected to be fire-related in 2006.
Dr Patricia Grossi, earthquake model manager at RMS, said: "The insured loss estimate for this event is four times greater than the 1994 Northridge Earthquake, the worst insured loss experienced to date in California.
"However, as a result of the dramatic decline in residential earthquake insurance take-up rates, the expected proportion of the total economic losses covered by insurance is lower than it was following the Northridge Earthquake.
"This insured proportion is also significantly lower than in 1906," she added.
