State Farm Expects 115,000 Damage Claims from LA Earthquake

Strategic Insights -

The Los Angeles earthquake, which occurred on [date not specified], is expected to result in about 115,000 damage claims from State Farm, California's leading insurer. This number is approximately four times the number of claims received after the 1989 Loma Prieta quake. The 6.6 magnitude earthquake caused significant damage, killing at least 60 people, injuring over 9,000, and estimated at $30 billion. State Farm, which serves about 24% of California's homeowner market, did not disclose the expected payout amount.

Key Takeaways:

  • State Farm expects to receive approximately 115,000 damage claims from the Los Angeles earthquake, which is about four times the number of claims received after the 1989 Loma Prieta quake.
  • The insurer did not disclose the expected payout amount, but noted that the average claim is expected to be higher due to the 5% deductible on quake insurance policies, which is offered on about 26% of State Farm's quake insurance policies in California.
  • Insurers estimate that 25-40% of homeowners in areas most affected by the quake have earthquake insurance.
  • State Farm's average payout will also be higher than from the 1989 quake due to its homeowners' policies containing a $2,000 benefit for extended living expenses if the home becomes uninhabitable.
  • The 1989 Loma Prieta quake resulted in about $120 million in claims for State Farm.
  • State Farm has about 24% of the California homeowner market.
  • The quake insurance policies with a 5% deductible were introduced in 1990.

Statistics:

  • 115,000: expected number of damage claims from State Farm
  • 4: times increase in claims compared to the 1989 Loma Prieta quake
  • $120 million: payout amount received by State Farm for the 1989 Loma Prieta quake claims
  • 24%: market share of State Farm in California's homeowner market
  • 5%: deductible on quake insurance policies with this option
  • 26%: portion of State Farm's quake insurance policies in California that contain the 5% deductible
  • 25-40%: estimated percentage of homeowners in areas most affected by the quake with earthquake insurance
  • $2,000: benefit for extended living expenses if the home becomes uninhabitable in State Farm's homeowners' policies
  • $30 billion: estimated damage from the Los Angeles earthquake

Sources:

  • State Farm Mutual Automobile Insurance Co.
  • Los Angeles earthquake press conference

(Note: The exact publication date of the Los Angeles earthquake is not specified in the source material.)