The earth’s surface is broken into plates that move and shift. When the plates bump up against each other, the sudden vertical or lateral movement releases seismic waves, which we feel as an earthquake.

According to the U.S. Geological Survey, there are more than three million earthquakes worldwide each year. While the vast majority of those are magnitude 3.9 or lower, more than 900 earthquakes measure 5.0 or higher each year.

While earthquakes can strike anywhere at anytime, history shows they occur in the same general pattern year after year. About 81 percent of the world’s largest earthquakes occur in the circum-Pacific seismic belt. The belt extends from Chile, northward along the South American coast through Central America, Mexico, the west coast of the United States, and the southern part of Alaska, through the Aleutian Islands to Japan, the Philippine Islands, New Guinea, the island groups of the Southwest Pacific and to New Zealand.

The most powerful earthquake on record occurred in Chile on May 22, 1960. The magnitude 9.5 quake caused $550 million in damage, killed more than 2,000 people and injured more than 3,000. It also caused a tsunami, which caused additional destruction in Hawaii, Japan, the Philippines and the west coast of the United States.

The largest earthquake in the United States was a magnitude 9.2 quake that struck Alaska on March 28, 1964. The earthquake and ensuing tsunami claimed a combined 125 lives (tsunami 110, earthquake 15), and caused about $500 million in property loss, or more than $3 billion in 2004 dollars.

While the United States experiences only two percent of the world’s earthquakes, some 90 percent of its population lives in seismically active areas. Statistics show that since the year 1900, earthquakes have occurred in 39 states and caused damage in all 50 states. More than 3,300 Americans have died in earthquakes in the 20th Century.

The size, or magnitude, of an earthquake is measured in several different ways. The Richter scale, which was developed in 1931, measures the size of earthquake waves. However, seismologists have declared the scale obsolete because it can be inaccurate in strong quakes and must be based on readings taken within a 100-mile range.

Today, more seismologists use the Moment Magnitude scale, which measures the size of the earthquake’s fault and how much of the earth slips at the time of the quake. A number of readings are taken, averaged and then adjusted to generate numbers similar to the Richter scale. This allows the magnitude of earthquakes measured on these new scales to be compared with the earthquakes recorded earlier.

According to the Moment Magnitude scale, the severity of an earthquake is based on the following measurements: 

     Less than 5.0 Small 
     5.0 – 6.0 Moderate 
     6.0 – 7.0 Large 
     7.0 – 7.8 Major 
     Greater than 7.8 Great

The most recent large earthquake in the United States to cause significant damage occurred on December 22, 2003, when a 6.5 temblor struck the San Simeon area of the California Central Coast, resulting in millions in insured losses and two deaths.

Prior to the San Simeon quake, the 2001 Nisqually Earthquake outside Seattle caused $305 million in insured losses and 325 injuries, but no deaths. The 1994 Northridge Earthquake, magnitude 6.7, caused an estimated $15 billion in insured damages (2008 dollars), leaving 57 dead and more than 9,000 injured. The magnitude 6.9 Loma Prieta Earthquake of 1989 resulted in nearly $1.7 billion in insured losses (2008 dollars), 62 deaths and 3,757 injuries.

After a disaster such as an earthquake, losses are classified as follows:

Economic Losses: These losses include the property damage, as well as loss of income due to businesses being unable to operate, workers compensation claims, etc.

Property Losses: These losses include any property that was damaged or destroyed, whether it is insured or not. These losses also include bridges, water lines, etc.

Insured Losses: These losses include damage covered by an insurance policy. The losses can be property loss, business interruption losses, life and workers compensation insured losses.