2011: A Record Year for Disaster Losses

Disaster LossesPhoto: USACEpublicaffairs

2012 has long been one of the most feared years in history in terms of natural disasters and other devastating events. However, it was 2011 that officially hit the record books in terms of losses from devastation caused by natural disasters and resulting insurance claims.

Now that 2011 has come to a close, experts are still looking at its losses in wonder while preparing for another year that could bring more surprises. With a great deal of uncertainty ahead, it’s undoubtedly time to learn how to prepare for natural disasters.

2011 Disaster Losses Reach Highest Level in History

For a while, it seemed that in the United States alone, there was news of tornado devastation or hurricane threats every week. But if anyone paid attention to news around the globe, they would remember that 2011 brought one of the most devastating tsunamis in recent history along with other tragic floods and earthquakes.

After such a tumultuous year, many are realizing how important emergency preparedness is.

The year experienced a shaky start with a 6.9-magnitude earthquake rocking Argentina on January 1. However, this disaster did not bring with it the major losses that some countries saw last year. Here is a short list of some of the biggest disasters and the loss totals of 2011:

Queensland, Australia ($7 billion)

One of the largest disasters to hit in 2011 came in January when rain-triggered floods swamped Queensland, Australia. Insurance companies estimated that economic losses from the floods totaled $7 billion.

Japan Earthquake and Tsunami (est. $210 billion)

In March, one of the most devastating and expensive natural disasters in global history was televised for the world to see when an earthquake that struck off the shores of Japan spurred a massive tsunami. In addition thousands of lives lost, some experts expected disaster costs to range from $210 billion to $309 billion.

April and Joplin U.S. Tornado Outbreak ($23.5 billion)

In April 2011, the United States saw the deadliest twister outbreak in 50 years hit much of the Southwest and Midwest. Then less than one month after the April tornado outbreak, Joplin, Mo. was devastated by a single twister that flattened much of the city. The loss of lives from April and May tornados surpassed 400 and costs from the disasters reached $23.5 billion.

Hurricane Irene ($3 billion)

In August, the East Coast was battered by Hurricane Irene, a storm that cut electric power to more than 6 million homes and businesses and caused multiple deaths. While insurance costs were expected to reach $3 billion, the estimates have since increased to several hundred billion.

This short list provides a small representation of the dozens of disasters that hit the world, costing hundreds of billions of dollars. As of July, 2011 was already the costliest year in history with $265 billion in confirmed disaster totals worldwide. In December, that number increased when reinsurance company Swiss Re AG estimated worldwide disaster losses for the year likely totaled $350 billion.

How to Prepare for Natural Disasters

The one thing more devastating than suffering through a natural disaster is being financially unprepared when one occurs. This is something that many victims experienced as they tried to piece their lives back together following a tragic event.

Most people think home insurance is enough to cover the costs of a natural disaster, but depending on what has affected your home, you may need flood, earthquake or even fire insurance to cover losses as well.

What’s striking is that most American families have no emergency preparedness plan in place. This means they’re not only financially ill-prepared for a disaster, they are completely unaware of how to prepare for a hurricane, earthquake, tornado, fire or flood among other unexpected events.

A study conducted by Columbia University’s Mailman School of Public Health revealed that 51 percent of families have no plan of action when it comes to food, water or other necessities required after a natural disaster or terrorist attack. Families even lack simple items like flashlights for power outages.

According to Ready.gov, being prepared for the worst requires much more. Just a few items that should always be placed in homes (preferably in disaster supplies kit) are:

  • Water (one gallon of water per person per day for at least three days)
  • Food (at least a three-day supply of non-perishable food)
  • Battery-powered or hand crack radio
  • First aid kit
  • Whistle to signal for help
  • Local maps
  • Manual can opener for food

In addition to keeping a kit in a designated location that is easy find in a rush, it’s important to brush up on earthquake safety tips, tornado and hurricane safety tips, flood safety tips and just about any other recommendations you can get your hands on.

As for setting aside money, it’s always good to keep as much as possible in an emergency savings account while ensuring that you maintain the appropriate insurance coverage for your home in case of natural disasters.

A natural disaster can strike at any time, which is why it’s important to always be prepared for the worst. If 2012 only partially mirrors what we experienced last year, it’s best to immediately speak with your insurance agent, brush up on safety tips and set emergency money aside so you’re not caught off guard if a disaster were to strike today.