Top 10 Most Expensive Disasters in U.S. History

Ryan Hanley headshot photo. Written by Ryan Hanley
Ryan Hanley headshot photo.
Written by Ryan Hanley

Ryan Hanley is a public speaker, podcaster and author of the Amazon best-seller, “Content Warfare.” Ryan has over 15 years of insurance expertise.

Hurricane Katrina was one of the most expensive disasters in U.S. history.

Improvements in early warning systems over the last few decades have saved hundreds of thousands of lives. We can now predict events such as hurricanes, tornadoes, and blizzards with incredible accuracy, hours or days before disaster strikes. But no matter how advanced our technology becomes, we still lack the power to prevent bad weather from wreaking havoc on our businesses and homes.

These are the top ten most costly disasters of U.S. history. They took lives, leveled homes, and caused billions of dollars in damage. The dollar amounts in the following statistics have been adjusted for inflation, and reflect 2012 equivalents.

10. Hurricane Rita

  • Cost: $19 Billion
  • Fatalities: 119
  • Date: September 2005
  • Location: East Texas and Louisiana

Rita came less than one month after Hurricane Katrina devastated New Orleans. Winds peaked at 175 mph over the Gulf, reaching speeds of 120 mph after making landfall in Texas and Louisiana. Researchers at the LSU AgCenter calculated that $227 million of the total loss was in forestry alone, with thousands of acres of timber wiped out at once. Authorities worked quickly to evacuate as many residents as they could, but 119 lives were lost.

9. Hurricane Ike

  • Cost: $29 Billion
  • Fatalities: 112
  • Date: September 2008
  • Location: Galveston, Texas

The small island of Galveston relies heavily on tourism and local oil companies to support the local economy. Before Hurricane Ike landed, 57,000 residents called Galveston home. Afterward, the population dropped to only 48,000. 

The official FEMA report mentioned that over 80,000 businesses were damaged or lost income because of the storm. Thousands of homes were destroyed, as well as oil platforms, tanks, and pipelines, leading to a gasoline shortage in the Southeast.

8. Drought and Heat of 2012

  • Cost: $30 Billion
  • Fatalities: 123
  • Date: Spring, Summer and Fall 2012
  • Location: The Midwest and Texas

2012 brought the worst dry heat disaster since the Dust Bowl. Farmers across Iowa and many other midwestern states lost entire crops and thousands of cattle, driving food prices to record highs across the country, and adding to recession woes. Many in the agricultural industry lost businesses, while others relied on credit and feared they would be unable to recover years down the line. 

Manish Bapna pointed out in his Forbes Magazine article that the loss of corn alone could be felt across the entire economy, affecting grocery store prices, corn-fed cattle prices, and ethanol production. 

7. Midwest Floods

  • Cost: $34 Billion
  • Fatalities: 48
  • Date: Summer 1993
  • Location: Midwestern States

Heavy fall rains and winter snows in 1992 saturated much of the Midwest. Then a string of summer storms pushed the Mississippi River so high that it broke the water level gauges. The levees collapsed. Farms and highways flooded. Over 20 million acres were affected, forcing 54,000 people to evacuate their homes and businesses. 

According to Lee W. Larson of the National Weather Service, 75 entire towns were "totally and completely under flood waters." Only a small fraction of the residents owned a flood insurance policy.

6. Hurricane Andrew

  • Cost: $45 Billion
  • Fatalities: 30
  • Date: August 1992
  • Location: Southern Florida and Louisiana

Hurricane Andrew measured as a category 5 hurricane, with winds reaching 177 mph. Normally storm surge is what causes the most damage in a hurricane, but in this case, the high winds were what flattened entire neighborhoods, leading to a new strictness in the enforcement of building codes across Florida. 

According to CBS News, 82,000 businesses were destroyed, and 250,000 residents were left homeless. Not only did Andrew level homes and claim lives, it also killed 200 million fish, devastating the local fishing and seafood industry for years.


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5. Hurricane Sandy

  • Cost: $50 Billion
  • Fatalities: 159
  • Date: October 2012
  • Location: New Jersey and New York

Hurricane Sandy caused water levels to rise dangerously high across the eastern seaboard, but New Jersey and New York were hit hardest. Winds from the hurricane affected homes over 1,000 miles away from the coast. 

Secretary Shaun Donovan, head of the Hurricane Sandy Rebuilding Taskforce, reported that as of August, 2013, FEMA has doled out $12 billion in federal relief loans to residents who lost homes during the storm. 

Only 72 of those who died were killed by the hurricane itself. The remaining 87 died of hypothermia or carbon monoxide poisoning due to a shortage of safe heating sources afterward, amid massive power outages and brutal cold. 

4. Drought and Heat of 1980

  • Cost: $56 Billion
  • Fatalities: 10,000
  • Date: June-September 1980
  • Location: Across the U.S.

Agriculture suffered the most from the extreme dryness and heat of 1980. Farms lost entire crops. Cattle ranchers were trying to recover from a six-year slump, but found themselves liquidating more calves than ever to save feed for their herds. Tourism and many other industries suffered as well, and NOAA estimated that 10,000 people without sufficient air conditioning or shelter lost their lives to heat stroke.

3. Northridge Earthquake

  • Cost: $65 Billion
  • Fatalities: 60
  • Date: January 1994
  • Location: Southern California

This 6.7 magnitude quake hit Los Angeles in the middle of a busy weekday. It toppled buildings and freeway ramps, and cracked streets full of traffic. The quake lasted around twenty seconds. It could be felt hundreds of miles from L.A., and left over 25,000 people homeless. The emergency response was the largest in U.S. history, and the economic effects lasted for years afterward. 

The Journal of Contingencies and Crisis Management reported, "Nearly 200,000 households applied to the U.S. Small Business Administration for loans to rebuild or repair their homes. Additionally, approximately 39,000 businesses applied to the Small Business Administration for disaster loans."

2. Drought and Heat of 1988

  • Cost: $79 Billion
  • Fatalities: 7,500
  • Date: Summer and Fall of 1988
  • Location: Central and Eastern U.S.

Farmers lost an average of 33% of their expected yield in 1988 due to the extreme heat and drought. Cattle ranchers had to reduce herds because of the lack of forageable grass and water. This drove up the price of meat across the nation. The dry conditions also led to a dangerous string of wildfires across the West. Yellowstone National Park experienced catastrophic forest fires. 7,500 people died of heat stroke and fire-related injuries.

1. Hurricane Katrina

  • Cost: $149 Billion
  • Fatalities: 1,836
  • Date: August 2005
  • Location: Mississippi and Louisiana

Katrina reached wind speeds of 174 mph, but the biggest damage was caused by the 20-30 foot storm surge, which broke levees and flooded 80% of New Orleans. Farms were destroyed. LSU AgCenter calculated that over $1 billion of the total loss was in crops, cattle, fisheries, and forestry. 

Towns and homes across the Gulf Coast were flooded and damaged, and thousands were forced to abandon their homes. In total, over 1,800 people died, in spite of efforts to evacuate before the storm struck.

Warning Systems Cannot Prevent Every Loss

No matter how much warning you have, there is not much anyone can do to stop the damage a natural disaster can cause. But there are steps you can take to prevent loss. The following are some safe practices to keep your family and property protected:

  • Keep a battery-powered radio handy in case of power outages.
  • Comply with evacuation orders as soon as possible.
  • Take tornado and hurricane warnings seriously, and seek appropriate shelter.
  • Never cross a flooded street.
  • Put together an emergency kit, including one to two weeks of food, water, and medicine for your family.
  • Keep important paperwork in a small airtight box or case, and take it with you when you evacuate.
  • Put your insurance agent’s card inside your wallet, so that you can call from your temporary shelter.
  • Insure your home against flood with a policy from the National Flood Insurance Program.
  • Keep comprehensive insurance on your vehicles.
  • Find out if wildfire and earthquake coverage are available in your area.
  • Check into farm and business insurance, to lessen your dependence on credit when disaster strikes.
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