Recent analytics suggest that yesterday’s Northern California earthquake could result in damages to the tune of $4 billion, due largely to damages to wineries and other tourist-friendly businesses.
An analytic report from Kinetic Analysis released earlier today posits that total losses could reach up to $4 billion, though it is estimated that insurers may cover approximately $2.1 billion out of that amount. “The main source of claims could well be commercial claims, those coming from wineries and vineyards and other commercial interests,” said Kinetic Analysis president Robert Hartwig in an interview with Bloomberg. “It will take a while for the business owners to sort this out.” Monday’s earthquake was the strongest recorded in Northern California in 25 years, and mainly struck the Napa region, an area famous for its wineries.
A separate report from Eqecat states that insured losses may reach $1 billion, with about half of that amount resulting from residential claims. “Business interruption losses are a major concern,” Eqecat opined, stressing that the Napa region is home to various “upscale and luxury boutique hotels, spas and inns,” apart from its world-famous wineries.
As Labor Day Weekend is fast approaching, analysts believe that there are still many undetermined variables that make it difficult to prognosticate just how a perceived lack of tourists may affect the Northern California wine industry as it stands. Keefe, Bruyette & Woods analyst Meyer Shields said that the main concern of the moment would be “how interrupted are (a business’) operations”, as opposed to whether operations will be interrupted or not, and such a variable is “completely unknowable” with just one day removed from the Northern California earthquake.