Throughout Earth's history, most natural disasters have been weather-related or resulted from eruptions or shifting plates beneath the planet's crust. Man-made disasters have also entered the fray in the form of wars, oil spills and nuclear meltdowns.

In recent years we have battled hurricanes, floods, earthquakes, tornadoes, wildfires and tsunamis. They have killed millions of people and permanently damaged property and the environment. The huge cost is borne by all of us in the form of higher insurance premiums, taxes and more debt. Here are a few of the most expensive disasters of various types that occurred over the past two decades.

TUTORIAL: Intro To Insurance

Japan Earthquake and Tsunami (2011)
Not since World War II has Japan faced a disaster on the scale of the devastating 9.0 earthquake that rocked the country on March 11. The death toll of over 16,000 could grow larger as there are close to 5,000 people still missing. While the human toll is substantial, there was also widespread destruction of homes, automobiles, aircraft, infrastructure and businesses.

The total economic cost of the disaster is close to $325 billion.

Beyond that, there have been ripple effects on the country's tourist industry due to concerns about nuclear fallout to the water and food supplies. Japanese companies, particularly the automakers, have suffered from disruptions to their parts supply chains. The impact spread across the Pacific to the assembly plants located in the U.S. and other countries. (Use these easy tips to protect your financial interests from natural disasters. For more, see Preparing Your Finances From Natural Disasters.)

BP Deepwater Horizon Oil Spill (2010)
While the cleanup cost for the oil spill in the Gulf of Mexico can now be reasonably estimated, the total cost will never be known with certainty. The spill had a ripple effect throughout the U.S. economy that is difficult to accurately pin down. Businesses along the coast suffered as tourists avoided the area and many fishermen were unable to work their normal fishing grounds. It also brought a halt to oil exploration and drilling in the Gulf, putting thousands of people out of work. Beyond that, no price can be placed on the 11 lives lost and the heavy damage to wildlife and the environment.

BP has budgeted $41 billion to cover its costs related to the cleanup effort, fines and compensation to damaged victims. This budget assumes that the company is not found guilty of legal wrongdoing, such as gross negligence. Moody's performed an independent analysis and estimated the cost to be $40-60 billion. It highlighted the uncertainty about possible future penalties and fines, and the likelihood that it would be late 2012 before legal proceedings are resolved.

The amount of oil that was lost is also in dispute. This is important because the estimated amount is used to calculate penalties. An open question is how much of the cost BP will be able to recover from its subcontractors, or if some of the subcontractors may be fined directly. (For related reading, see 6 Huge Insurance Claims.)

Hurricane Katrina (2005)
Six years after this category 5 storm slammed the Louisiana and Mississippi coastlines, it's clear that Hurricane Katrina is the most expensive U.S. natural disaster of all time. The federal government has provided funding totaling more than $127 billion targeted for a wide range of aid. This includes infrastructure repair and construction, temporary housing, school repairs and tax relief.

Insured losses are estimated to be approximately $60 billion, including flood damage. This compares to $21 billion of insured losses in current dollars for Hurricane Andrew which devastated south Florida in 1992.

While Katrina caused the most dollar loss, the human toll from the Galveston hurricane of 1900 was much higher. In those days, storms struck without warning and this one took 6,000 to 12,000 lives and leveled the city. That's a significant loss considering the population density was much lower over a century ago. In comparison, Katrina resulted in more than 1,800 deaths over a much larger geographic area.

Bottom Line
While it didn't make the list of biggest financial disasters, the massive 2004 Indian Ocean earthquake killed more than 225,000 people when a resulting tsunami slammed into 11 surrounding countries. The U.S. Geological Survey estimated the energy released by the quake to be equivalent to 23,000 Hiroshima-size atomic bombs.

There's not too much we can do about acts of nature, but there have been significant improvements in technology to help predict and monitor hurricanes, tornadoes and tsunamis. Weather satellites revolutionized the ability to track storms and ocean sensors can accurately forecast when a tsunami will crash ashore. These systems can help save lives, but they do little to reduce the physical damage left behind.

Earthquake technology is improving, but it's unlikely that quakes will ever be predicted with any degree of accuracy. It won't do much good to say that there's a high probability of an event within the next month. In fact, it would do far more harm than good if the prediction was wrong. (For related reading, see 5 Natural Disaster Scams To Watch For.)

Related Articles
  1. Economics

    The 2007-08 Financial Crisis In Review

    Subprime lenders began filing for bankruptcy in 2007 -- more than 25 during February and March, alone.
  2. Stock Analysis

    6 Risks International Stocks Face in 2016

    Learn about risk factors that can influence your investment in foreign stocks and funds, and what regions are more at-risk than others.
  3. Economics

    Lehman Brothers: The Largest Bankruptcy Filing Ever

    Lehman Brothers survived several crises, but the collapse of the U.S. housing market brought the company to its knees.
  4. Investing Basics

    Rise of the Co-Investment in Hedge Funds

    Learn about the rise of co-investment deals among hedge funds. See how these high-risk and high-reward opportunities are becoming more popular.
  5. Economics

    3 Financial Crises in the 21st Century

    Take a look at several of the most prominent financial crises of the 21st century, and understand why the Great Recession was a truly remarkable contraction.
  6. Economics

    Explaining Too Big To Fail

    Too big to fail means that a business has become so large that its failure would have catastrophic economic repercussions.
  7. Economics

    Chances That Mortgage Rates Will Decrease Are Low

    Understand why mortgage rates are not likely to decrease in 2016; in fact, most indicators point to modestly rising mortgage rates.
  8. Investing

    Understanding Black Swan Events

    Finance professor and Wall Street trader Nassim Nicholas Taleb popularized the term in his writings. The rise of the Internet, the Sept. 11 attacks and World War I were all black swan events. ...
  9. Investing

    5 Reasons to Rethink Retirement Investing

    Wherever you fall on a retirement crisis, consider these 5 reasons to rethink your investing strategy.
  10. Investing Basics

    4 Iconic Financial Companies That No Longer Exist

    Learn how poor management, frauds, scandals or mergers wiped out some of the most recognizable brands in the finance industry in the United States.
RELATED FAQS
  1. Which mutual funds made money in 2008?

    Out of the 2,800 mutual funds that Morningstar, Inc., the leading provider of independent investment research in North America, ... Read Full Answer >>
  2. Do negative externalities affect financial markets?

    In economics, a negative externality happens when a decision maker does not pay all the costs for his actions. Economists ... Read Full Answer >>
  3. What is the difference between disposable and discretionary income?

    According to the Bureau of Economic Analysis, or BEA, disposable income is the amount of money an individual takes home after ... Read Full Answer >>
  4. What are the major laws (acts) regulating financial institutions that were created ...

    Presidents George W. Bush and Barack Obama, in conjunction with Congress, signed into law several major legislative responses ... Read Full Answer >>
  5. What are the similarities and differences between the savings and loan (S&L) crisis ...

    The savings and loan crisis and the subprime mortgage crisis both began with banks creating new profit centers following ... Read Full Answer >>
  6. What measures could the U.S. Government take to prevent another crisis similar to ...

    Some of the measures that the U.S. government can take to prevent another crisis similar to the savings and loan (S&L) ... Read Full Answer >>
Hot Definitions
  1. Liquidation Margin

    Liquidation margin refers to the value of all of the equity positions in a margin account. If an investor or trader holds ...
  2. Black Swan

    An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult ...
  3. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  4. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
  5. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
Trading Center