Damage and loss assessment for the basic earthquake insurance claim of residential RC buildings in Taiwan

Abstract

A basic earthquake insurance policy associated with total loss coverage has been implemented in Taiwan to transfer risk caused by devastating earthquake. Acceptance of such an insurance claim depends on two criteria. One is that a building is identified as uninhabitable and requires rebuilding. The other is that the repair to replacement cost ratio of a building exceeds 50 per cent. Whether the first criterion is met or not depends on the building damage state, which can be determined through a damage rating system based on post-earthquake damage inspection on structural components and system. However, the second criterion has not been implemented for insurance adjuster without detail financial loss estimation by specialized engineers. In addition, there is no documented proof that these two criteria are consistent. This article aims to link post-earthquake damage of structural components to direct financial loss for RC residential buildings based on post-earthquake damage evidence. As a result, the second acceptance criterion can be implemented. The statistical analysis shows that the two criteria are consistent on average. A new assessment procedure by incorporating criteria in terms of both damage and direct financial loss has been introduced. With this loss model, half loss coverage or partial loss coverage could be introduced into the basic earthquake insurance in this region.