5 Most Expensive Natural Disasters
If the floods of last summer have done anything, its shown the public just how expensive natural disasters can be, and how little of it insurance companies are required to pay. In a previous article, we explained that insurance companies simply can’t foot the bill for some of these large losses, because it would completely ruin them financially.
Truth About Flood Insurance
So that naturally led us to wonder, exactly how expensive are the world’s natural disasters? And which ones are the most expensive? Read on to find out.
#5 – 1988-1989 North American Drought – $90 Billion
Generally when we think of disasters, we think of the large short term events like an earthquake or a tornado. But the truth is, drawn out weather patterns can be just as damaging, as proven by the drought North America experienced in the late eighties.
A quirk in weather patterns caused an unusually hot and arid summer, with nearly no precipitation in 1988, which wreaked havoc on America. Lawns turned brown, crops across the continent failed and wildfires raged unchecked as the sun burnt away any and all moisture.
The economic impact of the event was immense, as cities were forced to ration water and turn to underground “aquifers”, depleting a non-renewable resource North American countries rely upon to survive.
The majority of the $90 billion price tag was from crop loss in the worst drought since the infamous “dust bowl” of the 1930s. The heatwaves associated with the drought are also estimated to have ended more then 5000 lives.
#4 – Kobe Earthquake, Japan (1995) – $100 Billion
The Kobe earthquake, also known as the Great Hanshin earthquake, took place on the morning of January 17th, 1995 in the Japanese city of Kobe, a city with 1.5 million inhabitants.
This earthquake, which nearly registered a 7 on the Richter scale, demolished over 150,000 homes in Kobe, which is the main cause of the $100 billion cost of this disaster.
However, secondary effects, including fires that raged for days and over 40 noticeable aftershocks, continued to grow the cost of this earthquake, as thousands of displaced citizens refused to return to their homes out of fear. Collapsed sections of highway and destroyed infrastructure only made the response worse, as the cities’ production ground to a halt.
Unfortunately, the tale only grew worse. With only 3% of homes in the Kobe area covered under property insurance, it was the citizens and government who were forced to bear the brunt of this $100 billion catastrophe.
#3 – Hurricane Katrina, United States (2005) – $127 Billion
It’s hard to imagine an entire city being plunged underwater, but that is exactly what happened during the summer of 2005 when hurricane Katrina rampaged through Louisiana, overpowering the levee system which kept the city above water.
The broken levees let lose a tide of liquid the likes of which America had never before seen, and we hope will never see again. A great flood washed over the city of New Orleans, until more then 80% of the total municipal area was submerged underwater.
The death toll of 1,833 people was extreme in itself, but the storm obliterated nearly all property in New Orleans, and very little coverage was offered by insurance policies.
Americans responded immediately to the damage caused by Katrina, but their best efforts could only prevent further damage – the bulk of the $127 billion was done within a day of Hurricane Katrina’s landfall in Louisiana.
#2 – Sichuan Earthquake, China (2008) – $145 Billion
Coming in at an 8 on the Richter scale on May 12th 2008, the Sichuan Earthquake pulverized the Wenchuan County in Central China. This quake not only demolished buildings, but killed 69,197 people; making it the 21st most deadly earthquake in history and by far the most deadly natural disaster included on this list.
The death toll also included many schoolchildren, who died in poorly constructed “tofu-dregs schoolhouses”, which offered little structural stability in the face of such a powerful earthquake.
The loss of young life was so severe that the Chinese government actually lifted the “one child policy” for those families who lost their child in the quake – they would even allow so-called “illegal” children to be made legal following the death of their sibling.
After the dust had settled, and along with the horrific loss of human life, over $140 billion had been spent or been committed to as part of a monstrous rebuilding effort that became a part of China’s stimulus package in response to the 2008 financial crisis.
#1 – Tōhoku Earthquake and Tsunami, Japan (2011) – $235 Billion
Few natural disasters capture the imagination quite like a tsunami. The concept of an unstoppable wall of mysterious black water surging towards a helpless city is a powerful image indeed. Though many people imagine tsunami’s to be monstrous waves that reach into the sky, that thought is actually completely wrong. Regular tsunamis do not appear as high cresting waves, but rather are more similar to a rapidly rising tide.
Tsunamis are caused by water displacement, generally through submarine earthquakes, which was the case of the 2011 Tohoku Tsunami, caused by an earthquake with an epicenter just off Japan’s east coast.
The quakespawned a massive tsunami, which methodically plowed towards the shoreline of Japan, as the rest of the world watched in horror. Nothing could be done, but wait for the inevitable disaster.
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Compounding the damage of the tsunami and earthquake was the Fukushima Nuclear Reactor, where the flood damaged emergency equipment and lead to a systems meltdown as well as several hydrogen explosions.
By the time the crisis had passed, Japan had lost nearly 16,000 people, and the cost of the disaster would reach into the billions. Estimated by the World Bank to have cost $235 billion, the Tohoku Disaster takes its place as the most expensive in world history. We can only pray that it stays at that place for a long, long time.