Chapter 7 : Earthquake insurance as a hazard reduction strategy : The case of the homeowner

A case made in this chapterfor requiring homeowners in earthquake prone areas throughout the country to purchase insurance and adopt cost-effective Loss Reduction Measures (LRMs). Substantial empirical data show that many homeowners do not voluntarily purchase insurance because they perceive the probability of the event to be so low that "it cannot happen to me". One reason few individuals take steps to mitigate potential losses is that they have short-time horizons and are not convinced that the expected long-run benefits from the LRMs justify the upfront expenses. The available data indicates that many insurance firms could suffer substantial losses from a major earthquake. Many insurers claims will be from indirect losses such as fire and workers compensation which are covered by non-earthquake policies. A Federal reinsurance program, similar to the one proposed in the Earthquake Hazards Reduction Amendments Act now before Congress, could be an appropriate solution. In return insurers should be able to reduce premiums from what they currently charge and provide rate-based incentives to homeowners to encourage them to adopt cost-effective LRMs.(AU)

Giving and receiving aid

Most reseach devoted to the problem of giving aid in disaster has focused on the post impact period. In such situations there is usually altruism, but people tend to help family members, other relatives and friends before strangers. The research focuses on the impact period rather than the post impact period. Data were collected, with a mailed questionnaire, after the blizzard of January 1978 in the midwest of the U.S.A. during which people were inmobilized for as much as five days. Several measures of giving and receiving help were obtained. The question considered here is do the findings on helping patterns toward victims in a post impact period apply also to a situation of prolonged impact. Respondents gave and received more help form relatives and friends than from strangers. However, friends rather than relatives both gave and received more help. The usual patterns of the importance of the primary group; family, relatives and friends seem to have prevailed. One of the main difficulties of persons who are physically and socially isolate. (AU)

Nicaragua : An assessment of earthquake relief and reconstruction assistance

In December 1972, Managua was struck by a devasting earthquake that leveled about half the city, killed 10,000 and injured 20,000 people, destroyed over 40,000 homes, and left over 160,000 people homeless. To assist in the relief and reconstruction of Managua, the Agency for International Development and the international financial institutions provided assistance of about $143 million. The assistance greatly helped in taking care of immediate needs and restonring public services and facilities. It could have been more effective had some programs been completed on time and adequate provision been made for maintaining the facilities constructed. Many of the Las Americas housing units constructed in May 1973 still back indoor bathroom facilities, and the reconstruction of some public facilities is two years behind schedule. To speed up development, the Agency Mission in October 1976 assigned additional personnel to the programs. (AU)