While most homeowners and commercial property owners may not purchase earthquake insurance, standard insurance policies provide coverage for fire damage, including any fire losses that may result from earthquakes. So, private insurers are generally more concerned about potential fire following losses than earthquake shake losses.

The idea that fires following earthquakes could cause mega-losses to insurers gained prominence after a 1987 Insurance Research Council study on the potential losses. The study concluded that major earthquakes in the Los Angeles Basin and the San Francisco Bay area would be likely to cause major conflagrations, generating fire damage and insured losses of $4 billion and $17 billion, respectively, which would equate to nearly $15 billion and $65 billion today based on increases in population and property replacement values.