Nepal’s earthquake is a reminder that nature doesn’t always play nice. But just where do these disasters occur the most?
If nothing else, Nepal’s devastating earthquake is a reminder that nature doesn’t always play nice. Floods, cyclones and the like take a toll everywhere they hit. But just where do these disasters occur the most?
According to the International Disaster Database, each country is faced with different disaster challenges. Accumulated from the past 114 years, their system tells us what the most common catastrophes are and how to prepare those looking for insurance.
The U.S. disasters have the highest common occurrence, with 735 instances between storms, floods and tropical cyclones. Severe storms are the most likely. In 2013 alone, 54 percent of disasters were classified as storms, amounting to a total of $12.46 billion in insured losses for the year according to Aon Benfield.
While storms rank at the top, United Policyholders’ Executive Director Amy Bach says one of these high frequency disasters is particularly problematic for insurance consumers.
“A lot of people who should have flood insurance don’t,” said Bach. “They think, ‘if my house never flooded before, I don’t need flood insurance’.”
The 2013 floods in southern Alberta alone cost the province approximately $6 billion.
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As a result, consumers assume that the cheapest policy will be the best.
To prevent consumers accepting these, Bach suggests recommending a non-affiliated source of unbiased data. What consumers will not accept as fact from an agent, they likely accept from third party information.
“Consumers have unrealistic expectations of insurance that don’t reflect the reality that insurance policies are legal contracts with lots of fine print,” said Bach.
