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A list of the six largest natural disasters in the history of the United States and the role played by insurance in these events

Throughout its history, the United States has had to recover from catastrophic events such as hurricanes, and the role of insurance agencies has been crucial in these circumstances. Insurance plays an essential role in enhancing resilience to natural disasters by promoting recovery and encouraging investments to mitigate risks.

Below is a list of the six largest natural disasters in the history of the United States and the role played by insurance in these events.

1. Hurricane Katrina

In August 2005, Hurricane Katrina made landfall north of Miami as a Category 1 storm but strengthened to a Category 3 in the Gulf Coast states. With total losses of $180 billion, Hurricane Katrina stands as the largest disaster in U.S. and insurance sector history.

A total of $40.6 billion in insured damages were settled two years after the hurricane. It was noted that nearly 99% of the 1.2 million claims were completed. Compensations awarded to homeowners in the affected regions exceeded $16 billion, with approximately 93% allocated to victims in Louisiana and Mississippi.

2. Hurricane Harvey

In August 2017, a Category 4 hurricane caused historic flooding in Houston and its surroundings, with rainfall exceeding 30 inches. After the storm, around 92,000 Texas residents received flood insurance compensation estimated at $8.92 billion. Total losses from the hurricane amounted to $143.8 million.

However, Texans without flood insurance had to rebuild their lives using personal savings and, to the extent possible, federal assistance, as homeowners’ and renters’ policies rarely cover flood damage.

3. Hurricane Maria

In September 2017, a second tragedy struck one of Puerto Rico’s islands. Hurricane Maria caused damages estimated at around $100 billion. According to the Office of the Commissioner of Insurance of Puerto Rico, the hurricane generated over 287,000 insurance claims. Unfortunately, about 11,000 of these claims, equivalent to $2 billion in losses, could not be resolved.

In November 2018, Puerto Rico’s Governor, Ricardo Rosselló, enacted six laws aimed at expanding insurance coverage options and expediting post-disaster payments. However, these laws were designed for future situations and did not succeed in securing payment for all claims resulting from Hurricane Maria.

4. Hurricane Sandy

In late October 2012, a storm brought strong winds and a storm surge that caused major damage to water and electricity services in New York and New Jersey, with an estimated toll of 159 deaths and a total of $80 billion in losses.

Due to the impact of Hurricane Sandy, approximately 169,000 National Flood Insurance Program (NFIP) policies were issued in New York, and 236,000 NFIP policies were issued in New Jersey. Claims related to Sandy reached 57,000 in New York and 74,000 in New Jersey. With an average payout per claim of $61,000, the NFIP disbursed over $8 billion in both states.

5. Hurricane Ida

Ida is one of the three hurricanes in history to make landfall in Louisiana with sustained winds of 240 km/h, resulting in a total cost of $76.5 billion. In Grand Isle, Louisiana, all homes suffered damage, with 40% of them virtually destroyed.

Due to the significant magnitude of the losses caused by the hurricane, insurance companies could not cover all claims. After Ida, Access Home Insurance Co. faced claims totaling $180 million but only had $115 million available, while State National Fire Insurance Co. had $70 million in claims with only $41 million available. These insurers collectively represented 28,000 homeowners.

6. Hurricane Irma

Hurricane Irma, classified as a Category 5, caused significant devastation in the Virgin Islands and the Florida Keys in September 2017, resulting in total losses of $57.5 billion.

The intensity of the hurricane is reflected in almost a million recorded claims, with a total of 997,237, amounting to over $10 billion in estimated damages. According to insurers collecting this data, approximately 91.7% of claims have been closed. Of the reported closed claims, 311,550 have been concluded but not paid.


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