Biggest Storm Costs

Insurance, Natural Disasters, Storm Insurance


Not so long ago, residents of Mexico were primed for the impact of Hurricane Patricia. At one point, Patricia was the strongest storm ever measured on earth with sustained winds of over 200 miles per hour (mph). Experts predicted the potential for 40-foot waves and dangerous flash flooding along the coast of southwestern Mexico. The popular tourist destinations of Manzanillo and Puerto Vallarta were in Patricia’s sights.

Fortunately, Patricia and her 165 mph winds avoided the most heavily populated areas and ran into the mountains, where she rapidly weakened into a tropical depression. There were no deaths directly attributed to Patricia and far less property damage than expected.

The moral of the story: what makes a hurricane, typhoon, or cyclone expensive is not limited to its strength. Where and when it lands have a lot to do with it. The population density, housing structure, evacuation plans, and similar factors can make a huge difference. Consider these massive storms that may not have been the most powerful but were definitely among the most costly.

Five Devastating Storms

Hurricane Katrina – In August 2005, Katrina barreled into New Orleans and nearby areas, causing massive and well-documented flooding and chaos. Katrina was responsible for over 1,800 deaths and approximately $108 billion in collective damages. New Orleans has rebounded in many ways since then, but some areas of the city and the surrounding area have not recovered yet, and likely never will.

Hurricane Sandy – “Superstorm Sandy” was not the most powerful storm, but she took a path that optimized property damage and destruction. Not only did she do tremendous damage in the Northeast US, Sandy caused significant damage in Haiti and Cuba before striking the US and continuing on to inflict $100 million worth of damage in Ontario and Quebec. Sandy’s total bill was estimated at $68 billion.

Hurricane Ike – Ike was not a particularly powerful hurricane, only weighing in as a Category 2 at the time of his 2008 landfall along the Texas coast, but his sheer size caused massive storm surges along the coast and wind damage across states from the Texas landfall north to Michigan and east to Pennsylvania. Ike totaled $29.5 billion in damages.

The top dollar damages are more recent and within the US, due to the higher values and densities of buildings. However, several typhoons in Asia have caused incredible damage.

Typhoon Haiyan – Haiyan had 195-mph winds at landfall in the Philippines and killed an estimated 6,340 people (although some estimates are as high as 10,000). Haiyan (known as Typhoon Yolanda in the Philippines) caused approximately $15 billion in damage as she tore through the Philippines on the way to Vietnam and China.

Typhoon Mireille – Mireille raked the western coast of Japan in September 1991, causing an estimated $10 billion to $12 billion in damages in 1991 dollars. Mireille took a track similar to several other typhoons, but thanks to unusual wind patterns, Mireille caused a disproportionate amount of damage.

While these storms have caused considerable damage, the costliest natural disaster in the world as of this writing was not a storm at all — it was an earthquake. The 2011 T?hoku earthquake in Japan caused approximately $235 billion in damage, according to the World Bank. Most remember this earthquake from the corresponding tsunami that swamped the Japanese coastline and triggered the nuclear reactor crisis at the Fukushima Daiichi Nuclear Plant.

These natural disasters are all a not-so-subtle reminder that regardless of how many precautions we take, Mother Nature always wins in the end.



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