The Great San Francisco Earthquake & Fires of 1906
Building Codes & Insurance Industry
Often overlooked in the discussion about the 1906 disaster are the effects on the insurance industry and building codes. Although the earthquake was powerful, the city was woefully unprepared due to dubious construction practices, nonexistent seismic building codes, and unprotected lifelines.
After the earthquake, concerned citizens, government officials, and business leaders argued the need to develop meaningful building codes and construction processes – the dialogue yielded nothing substantive. The insurance industry struggled mightily to ascertain damages and to fulfill policies. The losses were unrivaled, a major city in ruins and thousands demanding compensation – even the 1871 fires that leveled Chicago failed to compare.
Fires Make a Bad Situation Worse
Although the earthquake devastated the cities’ structures, its greatest impact was fracturing the cities’ water supply leaving San Francisco at the mercy of the ensuing conflagration. Thus, the vexing task of determining the nature of the damage: fire or earthquake, or both, to what degree and so rolls the conundrum.
Some insurers satisfied the claims, other insurers paid and raised the premiums, and some insurers simply vanished leaving many destitute. Regardless of the outcome, the 1906 Earthquake and Fires forever altered the way insurance and building industries conducted business.