Earthquake CEs Capture the Potential for Future Events on Unknown Faults
Capturing the location effect is particularly important for earthquakes because many faults remain unknown and unmapped by scientists. For example, the fault that generated the last major earthquake in California—Northridge (1994)—was unknown prior to that event. Scientists handle unknown faults with background seismicity, i.e. accounting for the possibility of an earthquake anywhere. KCC scientists follow this approach and create background earthquake events on a uniform grid to make sure no geographical point where there could be an earthquake is missed in the models.
The Location Effect
Where an event occurs is the biggest driver of the resulting losses. A
magnitude 7.0 event near Los Angeles will cause much higher losses than
a larger magnitude 8.0 event on the southern San Andreas Fault.
According to USGS, a magnitude 7.0 can occur anywhere in California.
Therefore, it's critically important for an earthquake model to capture
all possible locations. KCC's unique CE methodology avoids the potential
sampling bias inherent in traditional earthquake modeling by
calculating the geographic area each magnitude earthquake would impact
and then spacing the background events on a grid to provide full and
consistent geographic coverage during loss analysis.