Most costly man-made catastrophe in United States history

September 25, 2001

Free Market Foundation

Authorities aren’t even hazarding estimates of the toll of deaths and injuries occasioned by last weeks terrorist attacks in New York and Washington. But experts say the events will constitute the most costly man-made catastrophe in U.S. history.

Until last weeks attacks, the largest man-made disaster was the Los Angeles riots of 1992 which caused $775 million in insured losses.

The World Trade Centre bombings in 1993 resulted in $510 million in losses the second most costly man-made disaster.

This disaster is likely to be on a par with a major hurricane in terms of its property damage, experts report and they suggest that Trade Centre losses might cost insurers and the owners more than $5 billion.

The price tag for Hurricane Andrew, which struck the South Florida coast in 1992, was $15.5 billion making it the most costly natural disaster in U.S. history.

Insurance experts say their industry is in good financial shape and they don’t expect a rash of industry failures. Nevertheless, it will take considerable time to assess all the damage and settle complex issues, they predict.

Source: Christine Dugas, Attacks May Set Record for Insurers, USA Today; and Andrew Ross Sorkin and Simon Romero, Reinsurance Companies Wait to Sort Out Cost of Damages, New York Times; both September 12, 2001.

For USA Today text
http://www.usatoday.com/money/general/2001-09-12-attacks-insurance.htm
For NYT text http://www.nytimes.com/2001/09/12/national/12INSU.html
For more on Terrorism http://www.ncpa.org/pi/congress/cong9.html

FMF\18 September 2001