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Catastrophe Facts & Statistics

What is an insured catastrophe?

A catastrophe, as defined by the insurance industry, is a natural disaster that causes a certain dollar amount, currently set at $25 million in insured damage. Individual insurance companies may declare a "catastrophe" based on the anticipated loss to their policyholders in the impacted area. In most cases, that means they will set up special claims processing centers, establish 24-hour emergency hotlines and send in additional, specially trained claims adjusters to the scene of the catastrophe. These "catastrophe teams" generally arrive as soon as possible and stay as long as they are needed.

From 1987-2006, hurricanes and tropical storms accounted for 46.3% of insured catastrophic losses, tornadoes 26.0%, 7.8% for winter storms, 7.5% for terrorism, 6.4% for earthquakes, 3.1% for wind, hail and flood,* and 2.2% for fire.

*Does not include damage covered by the National Flood Insurance Program

Flooding is the most common natural disaster; however, coverage for flood (defined as rising water) is excluded under most standard homeowners policies. For cars, flooding is covered under the comprehensive portion of most standard auto policies. Homeowners and renters who live in high-risk flood plains and whose communities participate in the National Flood Insurance Program, or NFIP (administered by the federal government) can buy special flood insurance through a company or agent.

Rocky Mountain Region Statistics
National Statistics
What to do in case of a catastrophe
Disaster-planning
Hail
Wildfire
Flood
Lightning
Tornadoes & Wind
Earthquakes
Winter Storms
Terrorism and Insurance

Rocky Mountain Region Statistics

• Colorado's most costly catastrophe is a $625 million hailstorm that battered the Front Range on July 11, 1990 ($996 million in 2007 dollars).
• Windsor, Colorado experienced a tornado and hail storm in May 2008 causing an estimated $147 million in insured losses.
• The 2002 wildfire season in Colorado was the most expensive in the state's history. The overall estimated cost of the Iron Mountain, Coal Seam, Missionary Ridge and Hayman Fires in Colorado is $70.3 million in insured losses ($81.1 million in 2007 dollars). Companies took in about 1,236 claims for the Hayman and Missionary Ridge Fires at an estimated cost of $56.4 million.
• In 2000, wildfire caused an estimated $140 million in insured losses to some 220 homes in Los Alamos, New Mexico ($168.5 million in 2007 dollars), making it the 8th most costly catastrophic wildfire in U.S. history.
• The blizzard of March 2003 was the most expensive winter storm from snow and ice damage in Colorado history. The estimated price tag was nearly $93.3 million ($104.1 million in 2007 dollars) from more than 28,000 claims filed.
• In June of 1990, a tornado touched down in Limon, Colorado causing an estimated $20 million in insured damages.
• A hailstorm in Albuquerque, New Mexico caused about $39.7 million in insured losses October 5, 2004.
• May 10, 2005, Hobbs, New Mexico's hailstorm caused approximately $21 million in insured losses.
• In June 2005, Lovington, New Mexico experienced $13.7 million in claims resulting from hail.
• Colorado's most costly catastrophes have primarily been hail storms over the Denver-metro area (largest concentration of population and, therefore, property damage)

Top Catastrophes in the Rocky Mountain Region
(in order of occurrence)

*2006 estimated costs calculated by the Insurance Information Institute according to the consumer price index.

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National Statistics

• 2005 was the most costly year on record for the insurance industry, in terms of natural disasters. The year saw 27 named tropical storms, 15 of which were hurricanes.
• The most costly catastrophe in the United States was August 2005's Hurricane Katrina. Prior to that, 1992's Hurricane Andrew and the September 11, 2001 terrorist attacks were the most costly insured events.
• The 1994 Northridge earthquake in California has been the most costly earthquake to date. It measured 6.8 on the Richter scale, resulting in 60 deaths, 12,000 injuries, and destroyed more than 8,000 homes.
• Approximately 1,200 tornadoes strike the US each year.

The Ten Most Costly Catastrophes in the United States

*The National Flood Insurance Program paid $15.6 billion in Katrina claims, in addition to the $40.6 billion paid by private insurers.

Source: Insurance Services Office, Inc. (ISO), Insurance Information Institute

The U.S. Catastrophe Record 1996 - 2006

The following chart shows the number of catastrophes causing insured property losses of at least $25 million.

Source: Insurance Services Office, Inc. (ISO), Insurance Information Institute

What to do in case of a catastrophe

Residents evacuated from their homes should contact their insurance agents or companies immediately and let them know where they can be reached. As adjusters are allowed into impacted areas, they will want to go in with their policyholders to access the extent of the damage. In the event of a catastrophe situation, many insurance companies set up 24-hour emergency hotlines.

Company claims adjusters, many equipped with laptop computers and portable phones, will start writing checks to pay the cost of temporary living expenses for people left homeless by catastrophes and to begin the rebuilding of damaged homes. Some companies will open special claims centers to assist their policyholders. Contact your agent or company if you need additional living expenses while you are out of your home.

Keep receipts. Out-of-pocket expenses during a mandatory evacuation are reimbursable under most standard homeowner policies.

Be prepared to give your agent or insurance representative a description of your damage. Your agent will report the loss immediately to your insurance company or a qualified adjuster who will contact you as soon as possible to inspect the damage. Again, be sure to give your agent a number where you can be reached.

Take photos of the damaged areas. These will help with your claims process and will assist the adjuster in the investigation.

Prepare a detailed inventory of all damaged or destroyed personal property. Be sure to make two copies-one for yourself and one for the adjuster. Your list should be as complete as possible, including a description of the items, dates of purchase or approximate age, cost at time of purchase and estimated replacement cost.

Make whatever temporary repairs you can. Cover broken windows, damaged roofs and walls to prevent further destruction. Save receipts for supplies and materials you purchase. Your company will reimburse you for reasonable expenses in making temporary repairs.

Secure a detailed estimate for permanent repairs to your home from a reputable contractor and give it to the adjuster. The estimate should contain the proposed repairs, repair costs and replacement prices.

Serious losses will be given priority. If your home has been destroyed or seriously damaged, your agent will do everything possible to ensure that you are given priority.

Disaster Planning

Do you know what to do in the event of a disaster? Are you ready if a fire, flood, or tornado strikes your home? It may not be fun to think about, but it never hurts to plan ahead - especially if you live in a disaster-prone area. Know where you should go, who you should notify, and what to bring. A great resource for disaster-planning is FEMA's "Are You Ready?" It walks you through steps you and your family can take so that you are better prepared should a disaster strike.

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Updated: August 19, 2008 2:51 PM
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