On August 24, 2014, a magnitude 6.0 earthquake struck California's Napa Valley. The quake was the strongest to strike the Northern California region since the 1989 Loma Prieta earthquake, which had a magnitude of 6.9. Over 200 injuries were reported, but only 17 patients were admitted to hospital, and no deaths have been reported. The governor of California declared a state of emergency, citing damage to critical infrastructure, including broken water mains and gas lines, damaged power lines, and buckled roads and highways.
Over 200 commercial and non-commercial buildings have been yellow-tagged in the Napa region, meaning that property owners are permitted to re-enter the building to clean up, but are not permitted to occupy the structure until further notice. Approximately 70 buildings have been red-tagged, meaning that they may not occupied at all. Several businesses in the region are shut down until further notice due to property damage.
The earthquake has also had a major impact on the $13 billion wine industry in Napa Valley. While grapes still on the vine have not been affected, damage to harvesting and processing equipment could delay or inhibit this year's harvest and crush. Additionally, several wineries and wine storage facilities reported a major loss of wine due to damaged barrels. It is anticipated that the biggest loss will be wines from the 2013 vintage, much of which is still in barrels, as most of the 2012 vintage has already been bottled.
All told, it is estimated that the earthquake caused $1 billion in property damage, and it is likely that a number of property damage and business interruption claims will be made to insurers. Approximately 90% of Californians do not have earthquake insurance, and most residential and commercial policies specifically exclude coverage for earthquake-related damage. The 1994 Northridge earthquake that struck southern California with a magnitude of 6.7 generated hundreds of thousands of insurance claims that totalled $12.5 billion, as well as a slew of bad faith and coverage lawsuits that went on for years. The Northridge quake also prompted the creation of the California Earthquake Authority, a state-run insurance pool, but historically high premiums and deductibles have caused many Californians to forgo earthquake-specific coverage.