The 20th anniversary of the Loma Prieta Earthquake occurred last month, which (in)famously struck the San Francisco Bay area before the third game of the 1989 Bay Bridge World Series between the Oakland A’s and San Francisco Giants. The quake measured 6.9 on the Richter scale and caused upwards of $12 billion in insured and uninsured damages, according to the Insurance Information Institute. Due to the coverage of the game, which was about two hours from beginning, it was one of the first natural disasters captured in real time on television as it occurred.

The anniversary was marked last month by Risk Management Solutions (RMS), which released a report that modeled a 7.2 magnitude earthquake along the Peninsula segment of the San Andreas Fault, which is located in the San Francisco area. Amongst other conclusions, it estimated that a quake of that size could cause $4 billion in losses due to residential damage, and $12 billion in commercial losses.

Perhaps scarier than billions in losses is another figure in RMS’ report: the residential earthquake insurance take-up rate across California is estimated at 12 percent — an unforgivably low figure. Even at its peak, earthquake insurance take-up rates barely reached 36 percent, RMS said. Let’s forget about Loma Prieta for a minute. Since then, the last earthquake to cause serious property damage was the Northridge Earthquake in 1994. It’s been all quiet on the western coast since then, with just six statistically significant quakes occurring, none of which caused notable damage on a grand scale.

Fifteen years is a long time since Californians have literally had their homes and businesses shaken to the ground. That’s a lot of time for apathy and denial to set in. Though Californians seem willing to shun the real risks facing them, insurers and claim adjusters don’t have the same luxury.

It’s not a question of if a quake occurs, it’s when. Adjusters must be prepared to handle the inevitable shock wave of claims. How many catastrophe adjusters on your staff have handled earthquake claims? How many claim managers and independent claim staff providers know that California now requires adjusters to be licensed before handling these specialty claims? These days, employees have to make themselves valuable to their employers. Are adjusters doing what it takes to stand out from the pack and protect their profession’s reputation when disaster strikes? When the Big One comes, will you be stuck making excuses?

It could be another 15 years before an earthquake devastates California or some other vulnerable part of the nation. But history says otherwise. Let the recent quakes in Indonesia and other places located around the Pacific’s Ring of Fire serve as a warning to adjusters that being prepared means making a conscious effort to stay that way.

Authors and engineers Lisa Shusto and John Osteraas provide their own warning in this month’s article on earthquake damage assessments, which discusses response efforts following the Northridge quake, an event that occurred just five years after Loma Prieta. "Inexperience, poor communication, and the lack of a consensus for engineering guidelines related to the investigation, assessment, and repair of earthquake damage led to inconsistent and sometimes inequitable damage assessments," say Shusto and Osteraas. "Other consequences included dubious repair recommendations, inequitable paid losses far in excess of predictions, and widespread controversy." 

Inconsistent. Dubious. Inequitable. Controversy. Inexperience. These are not the type of words we want to describe our industry’s next response to catastrophe. Let’s make sure we’re prepared to prove the doubters wrong, no matter what type of claim it is.