Probabilistic assessment of earthquake insurance rates for buildings - Seismic Risk Analysis and Management of Civil Infrastructure Systems - page 782

of earthquake insurance as well as on the fi nancial management of large-
scale catastrophes.
Although the concepts of earthquake risk were developed as early as the
1930s (Freeman, 1932), studies on the assessment of earthquake insurance
premiums, based on statistical methods and utilizing earthquake engineer-
ing concepts, are limited in number. Gurpinar et al. (1978) and Gurpinar
and Yucemen (1980) considered the problems related to obligatory earth-
quake insurance implementation in Turkey, and a pilot application was
carried out for a city in Turkey. Yucemen (2005) developed a statistical
model for the estimation of earthquake insurance rates, whereas Yucemen
(2005), Deniz and Yucemen (2007, 2009), and Yucemen (2007) applied this
model for the assessment of earthquake insurance rates for different seismic
zones in Turkey. Smolka and Berz (1989, 1991) developed a methodology
for obtaining insurance premiums consistent with seismic risk and potential
loss due to large earthquakes. Other major studies conducted in the fi eld
of earthquake insurance include Straub (1973), Vere Jones (1973), Lockett
(1980), Brillinger (1992), Kunreuther (1996), Walker (2000), Amendola
et al. (2000), Scawthorn et al. (2003), Yucemen et al. (2008), and Goda and
Yoshikawa (2011).
This chapter aims to present a simple probabilistic model for the assess-
ment of earthquake insurance rates by considering damage statistics and
potential seismic hazard. The proposed model is used for the assessment
of earthquake insurance rates for reinforced concrete buildings constructed
in different seismic zones of Turkey. The earthquake insurance premiums
are computed by considering the risk of shaking-related damage only; sec-
ondary losses resulting from fi re induced by an earthquake are omitted.
Within the context of this chapter, it is also aimed to give an idea about the
actual implementation of earthquake insurance in Turkey. Accordingly, in
Section 29.4, an overview of the compulsory earthquake insurance scheme
is given and background information on TCIP is presented together with
the objectives foreseen in establishing the TCIP and its organizational
structure.
29.2 Probabilistic model for the assessment of
earthquake insurance rates
Earthquake insurance rates should be calculated based on the frequency
and the severity of earthquakes. This corresponds to a conditional probabil-
ity of damage given a range of earthquake hazard levels. The frequency of
earthquakes at a site will be the same for all structures. However, the sever-
ity of damage depends on the structural system type, age, confi guration,
and other features. Hence, severity of damage to different facility classes
should be considered separately. Accordingly the assessment of earthquake