Shortly after the Loma Prieta earthquake devastated northern California in 1989, a fire broke out in a structure located in the prestigious Marina District of San Francisco. The fire destroyed a few structures that had just suffered the magnitude 7.1 earthquake, leaving many homeless. The structure in which the fire began was covered by a general liability policy with no earthquake coverage.
The damage was initially deemed a fire loss, and Exponent was retained by the insurance carrier of the structure in which the fire began, to determine whether the source of the fire was upstream or downstream of the gas meters. As a result of our investigation and the discovery of photographs showing that the four-story structure had collapsed to two stories during the earthquake, Exponent’s role was modified, with the main objective being to distinguish the damage caused solely by the earthquake from that caused by the subsequent fire.
Based on available data and photographs of other collapsed buildings in the Marina District, Exponent determined that all structures that had experienced either partial or full collapse as a result of the earthquake were eventually demolished. Thus, from a monetary standpoint, a collapsed structure was deemed a total loss after the earthquake. In ensuing litigation, the insurance company was found to be responsible for covering only those costs associated with demolition of the structure.