A 7.8-magnitude earthquake struck Nepal on Saturday near the capital city of Katmandu, and the death toll has now exceeded 3,000 victims, according to
BBC News.
The U.S. Geological Survey has placed preliminary estimates the costs of damages between $100 million and $10 billion, whereas IHS predicts that the recovery could exceed $5 billion, or 20% of Nepal’s gross domestic product (GDP).
"The standard of housing construction in Nepal is extremely low, which is why the damage to buildings has been extremely severe," Rajiv Biswas, chief economist, Asia-Pacific at HIS, told
CNBC.
What is perhaps most unsettling about the earthquake, however, is the fact that scientists predicted it about a week prior at a convention in Kathmandu.
"It was sort of a nightmare waiting to happen," seismologist James Jackson told
CNBC. "Physically and geologically what happened is exactly what we thought would happen.”
This earthquake may serve as a cautionary tale for Canada. In two of the nation’s most earthquake-prone regions, policyholders who would be protected in the event of a disaster remain rare.
According to the
Insurance Bureau of Canada (IBC), 55% of British Columbians and 96% of Quebecers have no earthquake coverage whatsoever. This is particularly startling considering that oil and gas drilling is causing a surge in earthquake phenomena, such as the record-breaking 4.4 magnitude quake that struck Fox Creek, Alberta in December.
The bureau also notes that Canada is the only nation in the Pacific “Ring of Fire” that hasn’t experienced a major earthquake in recent years.
56% of Canadians believe that the government would provide financial aid in the wake of a natural disaster, according to a survey conducted by Square One. Since Canadians can obtain insurance for this type of natural catastrophe, though, residents are not eligible to collect assistance from government services.
Since misconceptions such as these are rampant, the onus is on agents and brokers to educate clients about what coverages exist, whether as a standalone policy or a supplement to homeowners’ insurance.
The incident in Nepal may serve as a powerful catalyst to start this process, for as Robert P. Hartwig, president of the Insurance Information Institute told
WaPo in 2014
, “nothing sells earthquake insurance like an earthquake.”
