Cost of Napa quake put at US$4 billion27th August, 2014 by Lucy Shaw
The 6.1 magnitude earthquake that struck northern California in the early hours of Sunday morning is expected to lead to losses of US$4 billion.
As reported by Bloomberg, Kinetic Analysis Corporation came up with the US$4 billion estimate, US$2.1 billion of which it believes will be covered by insurers.
The company, which estimates the financial impact of natural hazards, put the figure so high due to damages incurred at wineries in the Napa Valley region and the resulting costs of having to remain closed to tourists during the clean up.
“The main source of claims could well be commercial claims, those coming from wineries and vineyards and other commercial interests,” Robert Hartwig, president of the Insurance Information Institute, told Bloomberg. “It will take a while for the business owners to sort this out,” he added.
Winery owners affected by the quake rushed to clean up the debris yesterday in order to be able to reopen for business and carry on with the harvest.
Due to a prolonged spell of warm, dry weather, the harvest is one of the earliest in the region’s history this year, having been brought forward from September.
Winemakers in the region are facing worsening drought issues, which have blighted vineyards across Napa for the last three years.
Napa has 789 licensed wineries, which had sales of US$5.5 billion in 2011. The vast majority of wineries in the region remain open for business following the quake.
Napa Valley Vintners has created a section on its website encouraging wineries to help their neighbours affected by the earthquake.
The primary needs are for temporary crush facilities; barrel storage; loans of winery equipment; and legal, accounting and insurance advice.