Insider Monkey
15 Most Dangerous States for Natural Disasters
Ty Haqqi
10 min read

In This Article:

In this article, we will be taking a look at the 15 most dangerous states for natural disasters. To skip our detailed analysis, you can go directly to see the 5 most dangerous states for natural disasters.

The first instance of insurance was recorded thousands of years ago, and the instance was also related to natural disasters. While climate change warnings have been called out for decades, its impact is only being felt right now, not just in the U.S. but across the world. This pans out when considering the total number of disasters by year, with 2020 being the worst such year as per the Federal Emergency Management Agency, though of course, a huge number of the disasters in the year were because of Covid-19, as FEMA includes biological disasters too. While most countries have agreed to reduce carbon emissions in a bid to slow down and ultimately reverse climate change, few nations are actually meeting their goals.

While there are still nearly a month left in 2023, the year has already set a U.S. record for billion-dollar weather and climate disasters, driven by the most dangerous states for natural disaster. In the year alone, there have been more than 23 natural disasters which have cost more than $1 billion in damage, breaking the record set earlier in 2020. Overall, nearly $60 billion worth of damage has been caused and resulted in the deaths of more than 250 people, again concentrated in the states with the most natural disasters.

15 Most Dangerous States for Natural Disaster
15 Most Dangerous States for Natural Disaster

Pixabay/ Public Domain

While natural disasters are impacting America's economy due to the massive damage caused, they're also having a major impact on insurance companies, especially those dealing with natural disasters. Most insurance policies by default exclude natural disasters coverage and generally, there is specific insurance to protect companies and even homeowners from the damage caused and an increase in the rate of natural disasters is resulting in an overhaul in the industry. However, while policies related to natural disaster insurance are evolving to cater to this change, it isn't straightforward. After all, a single major natural disaster could result in natural disaster insurance companies becoming bankrupt. This is especially true for major disasters such as hurricanes, whose frequency has increased as well. Of the total damage caused by hurricanes in the last hundred years, around 75% has occurred in just the last 20 years.

Another rising risk in the most dangerous states for natural disasters is the risk of floods, as erratic weather patterns have resulted in more torrential downpours which in turn have increased insurance risks. Allianz, one of the largest financial services companies in the world, called out the need for a smarter collaboration to mitigate rising flood risks. It mentioned that between 1980 and 2019, flood damage crossed $1,092 billion and only 12% of this amount had been insured, and in 2021 alone, over 50 severe flood events occurred across the world. Floods alone contributed to nearly a third of all damage caused by natural disasters globally in 2021, and even then, around 75% of flood risks remain uninsured. “Climate change is changing the way we need to look at physical risk for our customers,” says Holger Tewes-Kampelmann, CEO of Allianz SE Reinsurance. “Our job in the insurance industry is to make sure that we have a thorough and diligent risk assessment in place that goes hand in hand with mitigation actions to keep our business model sustainable.”

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