10 Costliest Catastrophes in the U.S.

published 1 January 2012

Catastrophes destroy homes and vehicles, displace families and interrupt business. The question is, who pays?

With the 2012 hurricane season in full swing, residents of the East and Gulf coasts are reminded yet again that disaster can strike with little warning. Having the right insurance is important. If an event similar to the Great Miami Hurricane of 1926 were to strike today, it would result in insured losses of $125 billion, estimates Karen Clark & Co., a risk-management firm, due to the greater concentration of people and property in coastal areas. Back then, however, few carried insurance.

Topics

Lists National Flood Insurance Program

1. Hurricane Katrina

Year: 2005

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2. Hurricane Andrew

Year: 1992

Disaster insurance tip: Mold is a four-letter word in the insurance business. If water enters your home, be it due to wind-driven rain, rising floodwaters or even a leaky pipe, work quickly to dry out wet spots and prevent future infiltration. Moisture is the key to mold growth. Also think twice before submitting a small water-related claim. Some insurers might raise premiums or even cancel coverage for fear the minor water damage will turn into a major mold cleanup.

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3. 9/11 Terrorist Attacks

Year: 2001

Disaster insurance tip: Homeowners and renters should be covered by standard policies in the event of a terrorist attack. In general, if your policy covers the type of damage you experience, such as fire, then you’ll get reimbursed even if the damage results from terrorism. Keep in mind, however, that homeowners insurance and renters insurance typically exclude acts of war and nuclear disasters. Read the fine print.

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4. Northridge (Calif.) Earthquake

Year: 1994

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5. Hurricane Ike

Year: 2008

Disaster insurance tip: Filing an insurance claim after a disaster is hard enough, but it’s especially tough if you don’t have detailed records of your belongings. That’s where a home inventory comes in. Use a digital camera or camcorder to document your possessions. Online inventory programs are also available. Or simple pen and paper can do the job. No matter the method, keep a copy of your home inventory in a safe place.

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6. Hurricane Wilma

Year: 2005

Disaster insurance tip: The IRS allows taxpayers who itemize to deduct casualty losses related to disasters such as floods, earthquakes, hurricanes, tornadoes and even volcanic eruptions. The calculations can get tricky. In general, to figure your deduction you’ll need to subtract any insurance reimbursements from your loss, then subtract $100 for each casualty that occurs during the year, and then subtract 10% of your adjustable gross income. Any leftover amount is your deductible casualty loss. Special tax rules apply to losses incurred in federally declared disaster areas.

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7. Hurricane Charley

Year: 2004

Disaster insurance tip: Keep important documents secure from the ravages of disaster. It’s usually best to stash wills, deeds, birth certificates, marriage licenses and the like away from home, such as in a bank safe-deposit box. If you prefer to have originals close at hand, invest in a fireproof and waterproof safe. Online backup services, such as Mozy.com and Carbonite.com, allow you, for a fee, to preserve your electronic files in the event computers and other devices are destroyed.

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8. Hurricane Ivan

Year: 2004

Disaster insurance tip: Preparation is the key to weathering any calamity. Long before disaster strikes, review your home, auto and life insurance to ensure that policies are up to date. Keep a list of important phone numbers handy, including the direct line to your insurance agent. Devise an evacuation plan for your family, and put together an emergency kit. Useful items include a portable radio, a rechargeable lantern and perhaps even a wad of cash in case you can’t get to a bank.

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9. Hurricane Hugo

Year: 1989

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10. Hurricane Rita

Year: 2005

Disaster insurance tip: Having the right insurance coverage in place is indispensible in the event of a disaster, but you shouldn’t pay a penny more in premiums than necessary. There are three easy ways to save on home and auto insurance. First, shop around. Different carriers offer different rates. Second, ask about multi-policy discounts, claims-free discounts and others. Third, raise your deductible to the highest amount you can afford.

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DeSenne made the leap to online financial journalism in 1998, just in time for the dot-com boom. After a stint with Dow Jones Newswires, dreams of IPO riches led him to SmartMoney.com, where over nine years he held several positions, including executive editor. He later served as the personal finance editor at HouseLogic.com and AARP.org. In 2011, he joined Kiplinger.com, where he focuses on content strategy, video, SEO and Web analytics. DeSenne has a BA from Williams College in Anthropology—a major deemed the absolute worst for career success by none other than Kiplinger.