On insurance settlements incident to the 1906 San Francisco Fire

Abstract

The San Francisco earthquake of April 18, 1906 caused widespread destruction and severe social disruption. This event provides a unique source of data for those concerned with preventing and controlling natural disasters. It is the only instance, in the United States, of a great earthquake striking a large city; and, hence, it is the only great U. S. disaster resulting from an earthquake. The fact that the destruction was caused by the combined action of earthquake and fire makes this disaster of special interest. Unfortunately, the knowledge of earthquakes and conflagrations, and disasters in general, was still in a relatively undeveloped state in 1906 and, therefore, information about the event is not as complete as would now be wished. Furthermore, the publications issued following the earthquake were not given wide distribution so that they are now not readily available for study. The 1906 San Francisco disaster had a major impact on the field of insurance and, in this regard, was unique in that both earthquake damage and fire damage were extensively involved; and this raised questions as to the relative liability of fire insurance and earthquake insurance. The magnitude of the insurance problem is indicated by the total loss of about $2,500,000,000 (in 1970 dollars), of which an estimated $1,500,000,000 of damage was caused by fire. There was an estimated $1,200,000,000 of insurance covering property in the burned district (1970 dollars). Because it struck a large city, the 1906 San Francisco earthquake caused damage losses approximately six times greater than did the 1964 Alaska earthquake, although the Alaska event was considerably larger in physical terms. Following the earthquake, the San Francisco Chamber of Commerce asked Professor Albert W. Whitney of the University of California to prepare a report on the fire insurance situation. His report was submitted on 10 November 1906 and was approved by the Chamber on 13 November 1906. Presumably it was published shortly after that date The report is now a very scarce item; the copy in the files of the Caltech Disaster Research Center is one of the very few extant. it was, therefore, decided to republish it so as to make its information available to those concerned with natural disasters. The body of Whitney's report is presented verbatim from the original copy. The only change made in the republished version was to insert a new Table of Contents in place of the original Index. The original index has been reproduced in the Appendix to exhibit what were thought to be the most important features of the report at that time.

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