Midwest quake could cause $100 billion damage: RMS

Reuters News
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Posted: Dec 07, 2011 1:23 PM
Midwest quake could cause $100 billion damage: RMS

NEW YORK (Reuters) - A moderate earthquake in the midwestern United States could cause up to $100 billion in economic losses and up to $50 billion in insured losses, catastrophe modeling company RMS said on Wednesday.

The RMS report came days before the 200th anniversary of the major earthquakes that struck around New Madrid, Missouri, causing shaking across much of the then-new nation.

Scientists say there is at least a one-in-four chance of another quake of magnitude 6 or greater in that region within the next 50 years.

If such a quake does happen, RMS said, economic losses would range from $10 billion to $100 billion and insured losses would be $5 billion to $50 billion.

There is so much uncertainty, the company said, because of questions around precisely where the temblor would occur and at what rate the shaking would subside as it travels from the epicenter.

RMS forecast that insurance would cover a greater portion of the total losses than is typical in natural disasters, and also a greater amount than would be covered in a California earthquake.

RMS is one of the three main modeling companies used by the insurance industry to predict its loss exposures under various scenarios.

(Reporting By Ben Berkowitz)