The basic objective of this paper is to inform seismologists of some of the major problems which confront the earthquake insurance underwriter and to point out certain areas which are in need of further research and study.
The basic factors which are generally considered in making fire and other property insurance rates are discussed with special emphasis on their application in the earthquake insurance field.
The most important factor from the standpoint of earthquake insurance is the element of time or frequency of loss occurrence. In this connection a comparison is made of the fire and earthquake loss ratios for the period 1916-1957.
The earthquake experience by geographic zone in the United States is discussed and a table is presented showing the frequency of United States earthquakes for the period 1638 through 1956. The author points out that based on this information, it would appear that earthquake rates in the Northeastern United States should be about of the rates charged in California.
A comparison is also made of the average damage in dollars for earthquakes of various intensities and a table is provided showing the results for earthquakes of intensity 7 and over on the Modified Mercali Scale.
The author concludes that the underwriter would be aided by more detailed information on individual earthquakes including specific information on the type of construction damaged, the type of ground upon which the building has been built, the total dollar damage and the estimate of property values in the high damage areas. Also needed is a further evaluation of the relation of intensity and frequency and better analysis of damage caused by earthquakes of various intensities.