1.18 - San Francisco - Human Management

Question 1

What was the financial impact of the 1994 Northridge earthquake?

Answer 1

Insured losses were four times the sum of premiums collected over 25 years.

Question 2

How did the Northridge earthquake affect insurance premiums?

Answer 2

Insurance premiums shot up after the earthquake.

Question 3

What happened to the percentage of insured Californian homeowners from 1996 to 2013?

Answer 3

It dropped from 1/3 to 1/10.

Question 4

What would be the estimated damage cost of a magnitude 7.2 earthquake in San Francisco?

Answer 4

$100 billion in property damage.

Question 5

Why are more Californians going without earthquake insurance?

Answer 5

Due to rising costs and diminishing benefits.

Question 6

How did the Northridge earthquake affect payouts relative to property values?

Answer 6

Payouts as a percentage of overall property values declined.

Question 7

What year had one-third of Californian homeowners insured?

Answer 7

1996.

Question 8

What percentage of Californian homeowners had insurance by 2013?

Answer 8

1 in 10 homeowners had insurance.

Question 9

Why is the rising cost of insurance problematic for homeowners?

Answer 9

It leads to more homeowners choosing to go without insurance.

Question 10

What is a major concern regarding future earthquakes in San Francisco?

Answer 10

The potential for $100 billion in property damage from a magnitude 7.2 earthquake.

Question 11

What financial trend is seen in earthquake insurance over time?

Answer 11

Increasing premiums and decreasing coverage.

Question 12

What did the Northridge earthquake reveal about insurance sustainability?

Answer 12

The financial burden on insurance companies was unsustainable.

Question 13

How does the declining number of insured homeowners affect risk?

Answer 13

It increases financial vulnerability after disasters.

Question 14

Why did insurance companies increase premiums after Northridge?

Answer 14

To cover the high cost of claims from the earthquake.

Question 15

What is one key financial lesson from the Northridge earthquake?

Answer 15

The need for more sustainable insurance models.

Question 16

What are homeowners’ concerns about earthquake insurance?

Answer 16

High premiums and limited payouts.

Question 17

How do economic factors influence insurance coverage rates?

Answer 17

High costs force people to opt out of coverage.

Question 18

What does the rise in uninsured homeowners indicate?

Answer 18

A lack of affordability and confidence in insurance.

Question 19

Why are payouts declining relative to property values?

Answer 19

Due to increasing property values and higher damage costs.

Question 20

What are the implications of uninsured property in earthquake-prone areas?

Answer 20

Greater financial losses for individuals and communities.

Question 21

What factors contribute to the high cost of earthquake insurance?

Answer 21

High risk and past costly payouts.

Question 22

How does public perception impact earthquake insurance adoption?

Answer 22

Perceived low benefit discourages homeowners from purchasing coverage.

Question 23

What could a major earthquake in San Francisco result in financially?

Answer 23

A massive economic burden exceeding $100 billion.

Question 24

What is a major takeaway from California’s insurance trend?

Answer 24

More people are taking financial risks by forgoing insurance.

Question 25

What are potential solutions to rising insurance costs?

Answer 25

Government intervention and revised risk models.