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Big earthquakes more likely, at least statistically

It's hard to know when an earthquake is going to hit, but when it does it could cost you big.

Thursday is the Great ShakeOut, the biggest annual earthquake preparedness event in history. Throughout the day, 20.6 million drills will be run across the U.S. to teach civilians and students about earthquakes. Leaving their place of businesses or school to practice their emergency evacuation plan will be part of the activities.

But here's the thing: Earthquakes are really hard to predict. We know they'll happen. Tectonic plates are shifting beneath our feet all the time. (If you didn't take earth science in high school and you're unclear on how earthquakes work, here's a quick explainer.)

Seismologists spend a lot of time developing models to predict how and when different plates will shift in their best attempts to provide an early warning to civilians. Over the past few years for example, scientists have updated their prediction model for California, called the Third California Earthquake Rupture Forecast model (UCERF3). Under the new model, mid-range earthquakes are less likely than before, but the likelihood of a huge one has increased.

Recent research found a link between two known faults running under San Francisco Bay, which increases the risk of a simultaneous rupture. That could be devastating for such a highly populated area.

Follow the toads

It's really hard to predict what the Earth is going to do.

Academics and government seismologists write complex and often indecipherable algorithms to try to forecast when an earthquake is going to hit.

There's evidence that wildlife may be better at predicting earthquakes than humans: In the 2009 earthquake that hit L'Aquila, Italy and cost nearly $3 billion in damages, a colony of toads reportedly left the area in the days before. Scientists are still trying to figure out the exact mechanisms.

Even when we know where a quake is likely to happen, there's still the question of how severe it will be. The damage caused by an earthquake depends on a lot of things: the depth at which it occurs, the material the earth is made of in the area, how close it is to a population center, etc.

The Richter scale — a measure of the severity of a quake — is logarithmic, which means that for each numeric increase, the severity increases tenfold. So an earthquake at level 6 is 10 times worse than one at level 5 and 100 times worse than one at level 4. Many people don't even notice a level 3 earthquake, while a level 7 can cause widespread destruction.

The other measure of earthquakes, the Mercalli intensity Scale, is a more subjective measure of the actual damage caused by an earthquake. It takes into account things like furniture movement during a quake, people being awakened by the event and resulting property damage, so it can only be assigned some time after a quake.

Economic quakes

The most destructive earthquake in recent history was the March 2011 9-point quake off the coast of Honshu, the main island of Japan. The quake cause a tsunami that inundated parts of the island, including the Fukushima nuclear power plant. In all, the catastrophic event killed some 15,000 people and caused over $230 billion in damages.

The most expensive earthquake to hit the U.S. recently was the 1994 Northridge quake in California that cost $64 billion, and was just a 6.7.

The unpredictability of tectonic plates — coupled with the massive destructive power — has also led to some interesting trends in earthquake insurance. Only 11 percent of Californians have earthquake insurance, according to Bloomberg.

That's often because the premiums and deductibles are so out of whack with other types of coverage. Insurance is normally all about odds: A car insurance company is essentially betting that the premiums they collect from drivers will be greater than the amount they have to pay out to those few drivers who get into accidents.

If an insurance company has to pay out for damage caused by an earthquake, it will be paying a lot of people a lot of money because of the widespread damage. As Bloomberg pointed out, earthquake insurance often carries a 10 percent to 15 percent deductible. That means that the owner of a $750,000 house in California will only start seeing coverage after paying out $112,500 from their own pocket.