News / Economy

    California Wine Country Quake Losses Seen in the Billions

    Winemaker Tom Montgomery stands in wine and reacts to seeing damage following an earthquake at the B.R. Cohn Winery barrel storage facility, Aug. 24, 2014, in Napa, California.
    Winemaker Tom Montgomery stands in wine and reacts to seeing damage following an earthquake at the B.R. Cohn Winery barrel storage facility, Aug. 24, 2014, in Napa, California.
    Reuters

    The strong earthquake that jolted residents of California's historic Napa Valley wine country out of their beds in the wee hours on Sunday caused insured property losses likely to run in the hundreds of millions of dollars, but the region's economic losses will be several times that amount, experts said on Monday.

    The magnitude 6.0 quake, the biggest to hit California's Bay Area in 25 years, struck before dawn on Sunday near Napa, injuring more than 200 people and damaging dozens of buildings in the picturesque community northeast of San Francisco.

    At least 49 buildings in Napa, a town of 77,000 residents, were “red-tagged” as unsafe to enter, including the Napa Senior Center and the local courthouse, and that figure was expected to rise as additional structures were inspected, officials said.

    The quake struck just as the grape-harvesting season is getting under way in Napa County, a significant wine-producing area that generates thousands of jobs in the region.

    • Andrew Brooks, associate winemaker of Bouchaine Vineyards, surveys fallen wine barrels after a 6.0 earthquake in Napa, California, Aug. 24, 2014.
    • Grace Hardy cleans up wine bottles at nakedwines.com in Napa, California, following an earthquake, Aug. 24, 2014.
    • Pedestrians stop to examine a crumbling facade at the Vintner's Collective tasting room in Napa, California, following an earthquake, Aug. 24, 2014.
    • Cracked asphalt along Highway 12, Napa, California, Aug. 24, 2014.
    • A vehicle is trapped beneath a collapsed parking structure in Napa, California, Aug. 24, 2014.
    • A fallen statue of Bacchus, a Roman god of wine,inside the Ceja Vineyards tasting room after an earthquake in Napa, California, Aug. 24, 2014.
    • Nina Quidit cleans up the Dollar Plus and Party Supplies Store in American Canyon, California, after an earthquake, Aug. 24, 2014.
    • A man photographs damage to a post office in Napa, Calif., following an earthquake, Aug. 24, 2014.
    • A reporter surveys the scene of a building collapse following a reported 6.1 earthquake in Napa, California, Aug. 24, 2014.
    • People look at a damaged building with a top corner exposed following an earthquake in Napa, California, Aug. 24, 2014.
    • Jean Meehan looks over the damage to her JHM Stamp and Collectibles store following an earthquake in Napa, California, Aug. 24, 2014.
    • People walk past a tumbled mannequin and broken storefront window on First Street following an earthquake in Napa, California, Aug. 24, 2014.
    • Bricks are in the street after a building was damaged during an earthquake in Napa, California, Sunday, Aug. 24, 2014.


    Wineries closest to Napa reported the most serious losses, but the full extent of damage had yet to be assessed, said Nancy Underwood of the Napa Valley Vintners Association.

    In the town of Napa, a number of building facades crumbled in the historic district, and the numerous wine shops were strewn with broken bottles. Most of the buildings red-tagged were damaged despite having been retrofitted to better withstand quakes, officials told a news conference.

    Disaster modeling firm CoreLogic estimated that total insured economic losses could range from $500 million to $1 billion, though the company acknowledged “a fair amount of uncertainty” around those numbers.

    Roughly a quarter to a half of that projection could come from residential losses, CoreLogic said, noting that $1.8 billion in insured claims were paid to policyholders after the magnitude 6.9 Loma Prieta earthquake that struck San Francisco in 1989.

    The Insurance Information Institute in New York likewise estimated that insured quake damage would probably measure in the hundreds of millions of dollars, though overall economic losses will likely run several times higher.

    The difference is because only about 6 percent of homes in the Napa area are covered by earthquake insurance, said Robert Hartwig, president and economist at the institute.

    Wine Country Knocked Sideways

    In Napa's wine country, businesses were grappling with the effects of the quake.

    “Everyone is working hard to get business back to normal as quickly as possible,” the Napa Valley Vintners Association said in a statement, adding that some wineries sustained damage to barrel storage areas, production equipment and wine inventories.

    At the Saintsbury winery, about a mile from the epicenter, co-founder Richard Ward said the start of his harvest would be likely postponed “for a couple of days.”

    No quake-related fatalities were reported, but the emergency room at Napa's Queen of the Valley Medical Center treated 208 patients hurt by the tremor, most for minor injuries, county emergency operations spokeswoman Nikki Lundeen said.

    Local battalion Fire Chief John Callahan on Sunday said three people were listed as seriously injured, including a child who suffered multiple fractures after a fireplace fell on him.

    “Civilian casualties were small. It could have been so much worse,” fire department representative Mike Randolph said.

    Six fires erupted, apparently from severed gas lines, including one blaze that destroyed six mobile homes, he said.

    Some 600 properties in town remained without water on Monday and several streets were closed due to debris. Area public schools were also closed.

    Power was initially knocked out to some 70,000 homes and businesses, but was restored by midday on Monday, Pacific Gas & Electric spokesman Jeff Smith said. He said crews were going door to door checking that all gas installations were safe.

    Governor Jerry Brown declared a state of emergency, putting state resources at the disposal of his Office of Emergency Services. The quake was felt throughout the Bay Area, with residents nearest the epicenter reporting severe shaking that lasted nearly a minute.

    Earthquake Near Napa, California (CLICK TO ENLARGE)Earthquake Near Napa, California (CLICK TO ENLARGE)
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    Earthquake Near Napa, California (CLICK TO ENLARGE)
    Earthquake Near Napa, California (CLICK TO ENLARGE)

    More than 90 percent of people living in Napa, Sonoma and Fairfield - all located less than 15 miles from the epicenter - were jolted awake by the tremor, according to the company Jawbone, which makes a popular health-tracking wristband.

    The tremor was the largest earthquake to hit the Bay Area since the Loma Prieta quake in 1989, which killed 63 people and caused $6 billion in property damage.

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