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Non-Structural Mitigation: Risk Transfer: (Group 8)

There are four basic methods for reducing earthquake risk: structural, locational, operational, and risk transfer. Risk transfer involves insurance and shares risk between parties rather than reducing risk absolutely. Earthquake insurance pays for damage from earthquakes but has high deductibles. Rates depend on location and probability of loss. Damage is now estimated using a damage ratio of earthquake damage cost to total building value. Risk transfer refers to insurance and is used when other risk reduction methods are not economically viable. Insurance can incentivize reducing risk through strengthening, but one earthquake can destroy many homes insured by one company. In the US, insurers stop selling coverage after significant quakes due to risks from aftershocks.

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Gerald Deocampo
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34 views4 pages

Non-Structural Mitigation: Risk Transfer: (Group 8)

There are four basic methods for reducing earthquake risk: structural, locational, operational, and risk transfer. Risk transfer involves insurance and shares risk between parties rather than reducing risk absolutely. Earthquake insurance pays for damage from earthquakes but has high deductibles. Rates depend on location and probability of loss. Damage is now estimated using a damage ratio of earthquake damage cost to total building value. Risk transfer refers to insurance and is used when other risk reduction methods are not economically viable. Insurance can incentivize reducing risk through strengthening, but one earthquake can destroy many homes insured by one company. In the US, insurers stop selling coverage after significant quakes due to risks from aftershocks.

Uploaded by

Gerald Deocampo
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

COLLEGE OF ENGINEERING
CIVIL ENGINEERING DEPARTMENT

Non-structural Mitigation:
Risk Transfer
(Group 8)

Gerald Angelo S. DeOcampo


Gilbert V. Aranda
Philip E. Gomez
Gerwin O. Torrente

There are four basic methods for reducing earthquake risk, termed
Structural, Locational, Operational, and Risk Transfer. Structural might also
be termed hardware, and refers to structures resisting earthquake forces, or
avoiding them (via for example base isolation). Locational is generally a
planning approach, while operational generally refers to training and
emergency response. All three of these tend to reduce the risk. Risk
Transfer most typically involves insurance, and does not reduce the risk in
absolute terms, but shares it, so that it is reduced in relative terms for each
party.
Earthquake insurance is a form of property insurance that pays the
policyholder in the event of an earthquake that causes damage to the
property. Most ordinary homeowners insurance policies do not cover
earthquake
Most earthquake insurance policies feature a high deductible, which
makes this type of insurance useful if the entire home is destroyed, but not
useful if the home is merely damaged. Rates depend on location and the
probability of an earthquake loss. Rates may be cheaper for homes made of
wood, which withstand earthquakes better than homes made of brick.
In the past, earthquake loss was assessed using a collection of mass
inventory data and was based mostly on experts' opinions. Today it is
estimated using a Damage Ratio (DR), a ratio of the earthquake damage
money amount to the total value of a building.

Risk Transfer traditionally refers to insurance, and is the method for


reducing that risk that cannot otherwise be economically reduced by
structural, locational or operational methods. Note that Risk Transfer doesnt
actually reduce the risk, but shifts it from the risk owner, to someone else
(like the insurance company). Risk transfer typically doesnt protect lives- if
a building collapses, people are still killed. Insurance can be a mechanism for
change however, if people see that its cheaper in the long run to reduce the
risk via strengthening etc., rather than paying insurance premiums.
As with flood insurance or insurance on damage from a hurricane or
other large-scale disasters, insurance companies must be careful when
assigning this type of insurance, because an earthquake strong enough to
destroy one home will probably destroy dozens of homes in the same area. If
one company has written insurance policies on a large number of homes in a
particular city, then a devastating earthquake will quickly drain all the
company's resources. Insurance companies devote much study and effort
toward risk management to avoid such cases.
In the United States, insurance companies stop selling coverage for a
few weeks after a sizeable earthquake has occurred. This is because
damaging aftershocks can occur after the initial quake, and rarely, it may be
foreshock. Although aftershocks are smaller in magnitude, they deviate from
the original epicenter. If an aftershock is significantly closer to a populated
area, it can cause much more damage than the initial quake. One such

example is the 2011 Christchurch earthquake in New Zealand which killed


185 people following a much larger and more distant quake with no fatalities
at all.

EVALUATION

NAME
DEOCAMPO, GERALD

GRADE

ANGELO S

95%

ARANDA, GILBERT V.

90%

GOMEZ, PHILIP E.

90%

TORRENTE, GERWIN O.

95%

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