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Inangahua quake left $39 million insurance bill - 24/05/1998

In dollar terms, the 1968 Inangahua earthquake was New Zealand's fourth most damaging earthquake this century. In 1998 values it cost $39 million in damage to buildings and their contents. Excluded from this figure is damage to roads, bridges and other uninsured property.

The 1931 Hawke's Bay earthquake tops the list at $512 million, followed by the 1987 Edgecumbe earthquake at $315 million, with the 1929 Murchison earthquake at $236 million raking third -- all 1998 values.

There were 10,000 claims lodged with the Earthquake and War Damages Commission (now the Earthquake Commission) after the Inangahua earthquake. Most were from the top half of the South Island, although they came from as far away as Taranaki.

Extracting valuable information from earthquake claims has become a science in itself and New Zealand is a world leader in this type of analysis.

Structural engineer David Dowrick, of the Institute of Geological & Nuclear Sciences Limited, is leading a three-year study of damage from the Inangahua earthquake, which includes an analysis of the 10,000 insurance claims.

The aims are to help predict the cost of property damage in future earthquakes, to improve design standards for new buildings and help strengthen older ones.

'' Statistical analysis of the figures will help engineers make buildings and structures less vulnerable to earthquakes,'' Mr Dowrick says.

'' The analysis also helps us understand how different ground types respond to earthquake shaking.''

Scientific and engineering studies of earthquake damage had their beginnings after the 1931 Hawke's Bay earthquake. As a consequence, earthquake design codes were progressively introduced from the early 1930s.

The work of Mr Dowrick's team, internationally acclaimed by scientists, engineers and the insurance industry for its precision and usefulness, plays an important role in reviews of building codes. It also determines appropriate levels of insurance and reinsurance, and helps in urban planning.

A vital input is the intensity of shaking at ground level, usually measured on the Modified Mercalli intensity scale. Shaking intensity is largely a function of magnitude and distance from the earthquake source, but is also affected by local ground conditions.

Once the attenuation relationship is established ( a function of magnitude, distance from the earthquake source, topography, and surface geology) scientists can predict the intensity of shaking at a given site for an earthquake of given magnitude.

Mr Dowrick takes the process a step further and calculates ''damage ratios'' where shaking intensity is translated into the expected cost of property damage at a given site.

Damage ratio is calculated by dividing the cost of damage to property by the total value of that property. This information allows insurance companies to set premiums based on expected losses.

'' The records tell us that since 1850 there have been 14 shallow earthquakes of magnitude 7 or greater in New Zealand -- an average of one every 10.5 years. We can't avoid or predict earthquakes, but we can lower our vulnerability by learning from them,'' Mr Dowrick says

The three-year research project is jointly funded by the Earthquake Commission (the Government's disaster insurer) and the Foundation for Research Science and Technology.