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Low earthquake insurance penetration limits Napa-related losses: Aon Benfield

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Low earthquake insurance penetration limits Napa-related losses: Aon Benfield

A low rate of earthquake insurance penetration in the Napa, California, area meant that insured damages from the Aug. 24 earthquake that struck that area will be far below the economic damage caused by the quake, according to a report released Friday by Aon P.L.C.'s Aon Benfield Group Ltd.'s Impact Forecasting.

In its monthly global catastrophe recap report, Aon Benfield said that the quake — which was the strongest to hit the San Francisco Bay Area in a quarter century — caused widespread damage to property, infrastructure, and wineries.

“In the city of Napa alone, at least 1,120 homes and other buildings were structurally damaged,” said Aon Benfield, with total economic damages reaching at least $2 billion.

But insured damage would be much less, “likely in the hundreds of millions” of dollars because of low residential earthquake insurance penetration in Napa County — 5.3% — and surrounding counties, with an average penetration of about 10%.

Aon Benfield's report noted that high rainfall led to substantial flooding in parts of the Midwest, Northeast and Mid-Atlantic, with some of the worst damage occurring in the Detroit area as well as in Baltimore and in Long Island, New York. Aon Benfield said that insured losses to private insurers and the federal government's National Flood Insurance Program exceeded $500 million.

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