NU Online News Service, June 16, 3:15 p.m. EDT

While the probability of an earthquake in the Pacific Northwestis considered "low" in the near future, insurers need to be mindfulthat they do occur and should mind their risk placements in citiesthere.

Aon Benfield offered the suggestion in a report titled "When theEarth Moves: Mega-Earthquakes to Come?" that reviewed the prospectof significant earthquakes throughout the world.

The report notes that 30 percent of commercial and residentialproperty in the Pacific Northwest region has earthquake coverage.Coverage there costs half of what it does in peak earthquake zonesin California.

However, the report cautions that banks and mortgage lenders donot "insist on insuring against this risk," and if they did itwould have significant implications of insurers.

The zone is defined as running from Northern California intoVancouver Island in British Columbia, Canada.

Earthquake insurance rates for both commercial and residentialproperties have fallen by around 5 percent over the past two tothree years, the report said. The region is generally seen as notparticularly vulnerable to such losses.

A mega earthquake, in the magnitude 8 or higher scale, in thisregion would probably not be a market turning event, the reportnotes, since there was no upshot in the price of coverage globallyafter events in Chile and Haiti. This is particularly true becauseof the lower population density in the region.

The last major earthquake in this region was a magnitude 9disturbance in early 1700, and there have been a total of 14similar quakes over the last 7,700 years.

The 28-page report examines other regions of the world includingthe Caribbean, Chile, Indonesia and Japan. It notes that in Chilerates are renewing at increases of 75 percent or higher.