October 16, 2009

Catastrophe Experts Urge Awareness and Congressional Action

on Loma Prieta’s 20^th Anniversary

The nation’s leading coalition of catastrophe experts, first responders, businesses and individuals today said that the 20^th anniversary of the Loma Prieta Earthquake should be a reminder to federal policymakers that America is vulnerable to enormous economic losses when the next major earthquake strikes and a warning that states like California are particularly vulnerable.

"The fact is, that California’s largest cities are  economically vulnerable as they were when the Loma Prieta Earthquake struck in 1989, when the Northridge Earthquake struck in 1994, or when the Great San Francisco earthquake struck in 1906," said James Lee Witt, co-chair of ProtectingAmerica.org and former director of the Federal Emergency Management Agency under President Clinton.

"It is easy to get lulled into believing that, ‘it can’t happen here,’ but earthquakes have happened throughout California, and they will happen again," he said.

"The potential economic impact would be devastating," he added.

According to a recently reported analysis by Risk Management Solutions, a 6.7 magnitude earthquake on the Hayward fault could result in $112-to-$122 billion in economic losses. A magnitude 7.0 quake along the length of the Hayward fault would result in $210-to-$235 billion in economic losses.

            "The high cost of earthquake insurance, the understandable tendency to avoid thinking about the consequences of a catastrophic earthquake, and the fact that some of the nation’s largest and most important cities are near fragile fault lines, combine to create a potential economic catastrophe," he said.

            "Clearly, we can’t control Mother Nature, but we can and should do something to improve awareness and to take action on the potential exposure to catastrophic events," he said.

"We should  do what we can to take some of the costs out of the insurance system and make homeowners insurance more affordable and accessible to California residents.  There is no question that enacting legislation currently pending before Congress and supported by President Obama could provide substantial and permanent savings to the state’s homeowners," he added.

According to an analysis of the Homeowners’ Defense Act, Californians would save a total of $3.28 billion, or $256 per household, by creating a private-public backstop to stand behind the traditional insurance market and cover truly catastrophic events.

A national catastrophe fund that would be accessible only to states that choose to participate would minimize the taxpayer bailouts that follow every major catastrophe and the likelihood that residents of low risk states would be called upon to cover losses in high risk states.

About ProtectingAmerica.org

ProtectingAmerica.org was formed in 2005 and is a non-profit organization consisting of emergency management officials, first responders, disaster relief experts, insurers, and others.  Its members include the International Association of Fire Fighters, more than 300 other organizations and businesses, and more than 20,000 individuals from across the nation.

The non-partisan organization is chaired by James Lee Witt and Admiral James M. Loy.  Mr. Witt served for eight years as the director of the Federal Emergency Management Agency.  Admiral Loy was formerly the deputy secretary of the US Department of Homeland Security and formerly served as commandant of the United States Coast Guard.

At the core of ProtectingAmerica.org’s mission is the creation of a comprehensive, integrated national catastrophe management solution that will better prepare and protect American families, communities, consumers, and the American economy from the financial devastation that can result from a major catastrophe and the ensuing need to rebuild.  Among its efforts to support this mission, ProtectingAmerica.org is working to increase public awareness and consumer education, to advocate for better coordination with local, state and federal mitigation and recovery efforts, and to strengthen emergency response and financial mechanisms to rebuild after a major catastrophe.

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