The 8 August earthquake which struck a touristy county of Sichuan Province has caused economic losses of at least CNY110 million (US$16.5 million), killed at least 25 people and injured more than 500, according to an estimate from the Sichuan authorities.
But the lack of earthquake insurance coverage in the region will hamper reconstruction efforts needed after the quake which had a magnitude of 6.5, according to the US Geological Survey. The China Earthquake Administration measured it at M7.0.
The tremblor struck Jiuzhaigou, a national park and Unesco World Heritage Site which is famed for more than 140 lakes whose waters range from crystal-clear to turquoise, lying at the feet of forest-clad mountains.
Despite the 2008 devastating earthquake in Sichuan province that killed more than 69,000 people, quake insurance coverage remains low, reported South China Morning Post.
Efforts to develop quake insurance are still at the nascent stage. In April, CIRC and China Earthquake Administration (CEA) signed a strategic cooperation agreement to promote and establish an earthquake catastrophe insurance system featuring Chinese characteristics.
In July last year, China launched the sale of the country’s first earthquake insurance policy for residential property. Homeowners can buy insurance policies with a maximum payout of CNY1 million (US$150,000) to cover loss and damage to residential property caused by earthquakes with a magnitude of 4.7 and above. The insurance policy is part of China’s effort to establish a catastrophe insurance system aimed at using a market-driven mechanism to support disaster relief work and to reduce the fiscal burden of the government for loss compensation.