The firm forecast that if damages were below the deductible, insured losses would be relatively low; if above, there would be a distinct jump in claims.

( California also offers catastrophic residential earthquake insurance through its California Earthquake Authority, a publicly managed, largely privately funded organization. The CEA writes two-thirds of earthquake insurance in the state.)

AIR Worldwide?which dispatched a post-disaster reconnaissance team to California to inspect the damage?noted that destruction was reported in a wide area from the coast to Highway 101 inland.

Paso Robles, and to a lesser extent Atascadero and Templeton, were the most severely hit towns in the region, according to the modeling firm. Fortunately, the quake did not affect major urban centers in the state.

AIR's reconnaissance team told National Underwriter that in downtown Paso Robles, the most severe damage was concentrated in a five-block area encompassing about 90 buildings (roughly 700,000 square feet of commercial space), many of which are of unreinforced and unretrofitted masonry dating back to the 1890's.

City officials there estimate about $100 million in ground-up losses in that area alone, AIR Worldwide noted. The town's landmark nineteenth-century "acorn" clock tower building collapsed, killing two people. Non-structural and contents damage in this commercial area was also severe.

The catastrophe modeling firm observed that contents damage was widespread in the many wineries in the rolling hills around Paso Robles and Templeton, with severe economic consequences to this burgeoning and mostly earthquake-uninsured business. High stacks of wine-filled wooden barrels, unrestrained to lateral forces, collapsed during the ground shaking.

AIR Worldwide also said minor damage was reported to local industrial facilities. The Diablo Canyon nuclear power plant, located about 35 km from the fault rupture, was found to be undamaged and continues to operate, however. This was to be expected given that the earthquake scenario design for such a critical facility is significantly larger than the San Simeon quake.