Editor's Note: For 30 years, AIR has been helping companies assess and manage the financial risk from infrequent but potentially devastating natural catastrophes. To provide a sense of the potential impact, AIR periodically publishes a list of the costliest historical U.S. hurricanes and earthquakes were they to recur today—that is, adjusted not only for cost inflation, but for population and exposure growth, as well as changes in wealth. In Part I of this two-part series, AIR discusses the top 10 hurricanes. The rankings below correspond to AIR's June 2017 update to its U.S. industry exposure database reflecting replacement values of properties insured against the hurricane peril as of the end of 2016.
Before Harvey, Irma, and Maria, there were Katrina, Andrew, Betsy...
Before this summer’s hurricanes Harvey and Irma broke the 11-year “drought” of major U.S. hurricane landfalls, most people probably thought that as many as six of the top 10 U.S. storms occurred in 2004 and 2005, with Hurricane Katrina in 2005 as the highest. Sandy, which struck New York and New Jersey coastal areas very hard in 2012, is generally considered to be among the top three. Those rankings, however, are based on reported insured losses at the time the events took place, and while they may be trended to today's dollars, they are not trended to today's exposures.
The number and value of properties in the United States, particularly in areas at risk, have increased dramatically in the past century, well beyond the rate of inflation. The recent rapid growth of Houston is a prime, if unfortunate, example. It is therefore more interesting and relevant to consider the devastation of historic storms ranked by modern exposures. Note that while Harvey caused a massive amount of damage, it was not a major wind and surge event, which these ranking are based on. And while the insured losses for wind and surge have yet to be tallied for Irma, this storm may not even crack the top 10.
Using current property exposures, the list looks quite different. The only storm this century to rank among the top 10 is Hurricane Katrina. Sandy, which caused $19.1 billion in insured losses, does not even make our top 10 list. Appearing in the number one position is a storm that may be unknown to many: the 1926 Great Miami Hurricane (hurricanes were not systematically named by the World Meteorological Organization until 1953). This Category 4 storm made a direct hit on Miami but, at the time, Dade and Broward counties had a combined population estimated at roughly 135,000. With a current combined population of more than 4.5 million, that storm would likely result in insured losses exceeding $128 billion—a figure that is particularly interesting to consider in light of Irma’s earlier forecast landfall there.
Using the AIR Hurricane Model for the United States, AIR simulated the meteorological characteristics of each storm. The resulting estimates of insured losses represent what these events would cost the insurance industry today based on AIR's detailed industry exposure databases and peril-specific take-up rates. The following chart shows the estimated impact of the top 10 historical U.S. hurricanes.
The real purpose of catastrophe models is to prepare for potential large losses before they occur. To account for the full range of potential scenarios, the AIR U.S. hurricane model contains many possible events that could result in even higher losses than those listed below.
Great Miami Hurricane (1926)
The 1926 Great Miami Hurricane was an intense storm that devastated Miami and caused extensive damage in the Florida Panhandle, Alabama, and the Bahamas. The storm developed off Cape Verde on September 6 and traveled toward St. Kitts and the Bahamas. On September 18 the hurricane made landfall south of Miami as what would be categorized today as a Category 4 storm on the Saffir-Simpson scale; winds on the ground were reported at 125 mph and a 10- to 15-foot storm surge inundated the area.
The storm crossed Florida, entered the Gulf of Mexico, and made landfall again near Mobile, Alabama, on September 20 as a Category 3. The storm then traveled westward over Alabama and Mississippi, eventually dissipating after entering Louisiana.
Heavy damage from wind, rain, and storm surge was reported along the Florida coast, but the greatest devastation was in Miami. In a boom town that had more than doubled in size within the previous three years to a population of roughly 135,000, many were unfamiliar with the nature of hurricanes. Reports say people filled the streets when the eye passed over, thinking the storm was over. Very strong southeasterly winds on the far side of the eye then struck, causing further destruction and a storm surge that reached across Miami Beach into the City of Miami for several blocks. It is estimated that nearly 370 people were killed, and between 25,000 and 50,000 people were left homeless.
Great Okeechobee Hurricane (1928)
As the first recorded hurricane to reach what is now considered Category 5 status in the Atlantic Basin, the 1928 Great Okeechobee hurricane is one of the 10 most intense storms documented to make landfall in the United States. It currently remains the only storm of Category 5 intensity to have made landfall in Puerto Rico.
The hurricane, first observed east of Guadeloupe on September 10, caused heavy crop and property damage when it passed over the Leeward Islands on September 12. It struck Puerto Rico on September 13 as a Category 5, with winds up to 160 mph. After crossing the Bahamas as a Category 4, the hurricane then made landfall in West Palm Beach, Florida, on September 16 with maximum sustained winds near 150 mph and a central pressure of 929 millibars.
While coastal damage in southern Florida was catastrophic, the most extreme destruction occurred inland at Lake Okeechobee. Strong wind generated storm surge that breached the dike around the lake, resulting in a flood that was 20 feet deep in some places and covered hundreds of square miles. The Great Okeechobee Hurricane left thousands homeless and more than 4,000 dead. The storm is the second deadliest hurricane in U.S. history.
Hurricane Katrina (2005)
Hurricane Katrina formed as a tropical depression over the Bahamas on August 23 and became a Category 1 storm only two hours before it made landfall in southern Florida on August 25. The storm weakened over land but quickly regained strength and nearly doubled in size as it crossed the Gulf of Mexico.
On August 29 the storm made landfall in southeastern Louisiana, where it caused massive property damage and loss of life. Storm surge led to 53 different levee breaches in greater New Orleans, resulting in roughly 80 percent of the city being submerged under floodwaters. A third U.S. landfall occurred at the Louisiana/Mississippi border at Category 3 intensity. Storm surge, strong wind, and heavy rain caused billions of dollars of damage (2005 currency).
The effects of Katrina were widespread. As the hurricane traveled inland and toward the northeast, its outer bands spawned some 62 tornadoes, causing damage in eight states. Tropical storm–strength gusts were recorded as far north as Kentucky, and strong winds downed trees in the state of New York. Significant rainfall occurred in 20 states and parts of Ontario, Canada. In the U.S., an estimated 1,800 people lost their lives in the hurricane. Estimates of total economic losses from Hurricane Katrina vary, but most are considerably more than double the estimated insured loss.
Fort Lauderdale Hurricane (1947)
This intense storm, also known as the Pompano Beach Hurricane, affected the Bahamas, Florida, Louisiana, and Mississippi. It developed east of Cape Verde on September 4, and reached peak winds of 160 mph as it passed over the Bahamas. On September 17 it made landfall near Fort Lauderdale as what would later be rated a Category 4, with wind speed readings at 155 mph—the highest ever recorded in the state of Florida (until Hurricane Andrew).
The hurricane was unusually large, with hurricane-force winds extending an estimated 120 miles from the center. Eleven-foot storm surges along the coast caused extreme flooding and washed out large stretches of highway between Palm Beach and Boynton Beach. Records for single-month rainfall were set in some areas. The hurricane traveled in a northwesterly direction into Louisiana and Mississippi, where storm surge and heavy rain caused extensive crop and property damage. In total, 51 people lost their lives.
Hurricane Betsy (1965)
Hurricane Betsy formed east of the Windward Islands and moved northwestward across the Atlantic, at one point making a complete loop. The storm looked to be heading toward the Carolinas, but instead made a second loop and passed over the Bahamas. Betsy made landfall in Key Largo, Florida, on September 8 as a Category 3 storm. Winds up to 155 mph were recorded as the storm gained intensity while crossing the Gulf of Mexico. On September 9 the storm made landfall as a Category 4 in Grand Isle, Louisiana, just west of the mouth of the Mississippi River.
Betsy, which killed approximately 76 people, destroyed nearly every building in Grand Isle and caused extensive flooding of the Mississippi River and nearby lakes. It was the first hurricane to cause more than a billion dollars (1965 currency) in economic losses, thus earning it the nickname "Billion Dollar Betsy." Devastation from the storm included 164,000 flooded homes and the destruction of eight offshore oil platforms. Hundreds of marine vessels were damaged and 30 miles of the Mississippi River were blocked due to shipwrecks. At the time, Betsy was the costliest hurricane to make landfall in the United States.
Hurricane Andrew (1992)
Hurricane Andrew began as a tropical storm off the coast of Africa on August 14. The storm reached peak winds of 170 mph off the Bahamas, where it caused extensive damage. At about 4:00 a.m., August 24, the eye of Hurricane Andrew passed over Elliot Key on the eastern edge of Biscayne Bay. The Fowley Rocks Buoy, located just to the east, recorded sustained winds of 141 mph as the eyewall passed. Data transmission ceased after that reading. Storm surges were recorded from Turkey Point in the south to as far north as Miami; the highest was 16.9 feet at the Burger King International Headquarters on the western coast of the bay.
Andrew's eye made landfall just east of Homestead Air Force Base at about 5:00 a.m. The eye was about 15 miles in diameter and central pressure had fallen almost 45 millibars to an estimated 922 mb. Just before they were destroyed, instruments at the National Hurricane Center (NHC) in Coral Gables, at the northern edge of the eyewall, recorded a maximum sustained wind of 138 mph, with a peak gust of 164 mph. In 2002, the NHC reclassified the storm as a Category 5 hurricane, up from Category 4, making Andrew only the third Category 5 hurricane to strike the continental U.S. since 1900.
Andrew destroyed more than 25,000 homes in Dade County and damaged 100,000 more. About 90 percent of all mobile homes in south Dade County were destroyed. Twenty-six deaths were directly attributed to Andrew, with an additional indirect toll of about 65. Andrew briefly re-intensified over the Gulf of Mexico and made a second landfall in Louisiana, where storm tides, tornadoes, and winds up to 105 mph damaged crops and property. Insurance claims from the storm contributed to the bankruptcy and closure of 11 companies and drained excessive equity from some 30 more.
Hurricane Donna (1960)
Hurricane Donna holds the record for the longest-lasting major hurricane in the Atlantic, where it ambled for a total of 17 days. For nine of those days, Donna consistently maintained wind speeds of at least 115 mph. Donna finally made landfall in Marathon, in the Florida Keys, as a Category 4 on September 10, 1960. Gusts up to 180 mph were recorded and 13-foot storm surges destroyed coastal properties. In southwestern Florida, 30 percent of the grapefruit, 10 percent of the orange and tangerine, and nearly all of the avocado crops were lost.
The storm continued up the East Coast, landing first in North Carolina and then Long Island, New York, on September 12. In the Carolinas, Donna uprooted trees, downed power lines, and blew roofs off homes. Sustained winds of 105 mph were reported in Long Island and Rhode Island. Storm surge in New York Harbor reached 11 feet. Blue Hill Observatory in Massachusetts reported gusts exceeding 145 mph. In all, damaging winds from Donna affected every state from South Carolina to Maine. A total of 364 people lost their lives during the storm, 50 of them in the United States.
The Great New England Hurricane (1938)
By far the most severe hurricane to have struck the northeastern United States since 1900 was the Great New England Hurricane of 1938, otherwise known as the Long Island Express. The storm made landfall in Suffolk County, Long Island, on September 21, and continued inland through Connecticut, Massachusetts, Vermont, and even into Canada. Maximum sustained winds of 121 mph, peak gusts of 184 mph, and a central pressure reading of 946 mb were recorded in this Category 3 storm.
Even though the affected area was far less populated than it is today, the cost of the 1938 storm was immense for the time. Strong wind and storm surge resulted in approximately 680 deaths, 700 injuries, and the damage or destruction of 57,000 homes throughout the Northeast. Significant structural damage occurred far inland, as shown in photos taken in Worcester, Massachusetts, some 140 miles from the point of landfall. The high level of damage so far inland was possible because the storm was travelling at a forward speed of 50 miles per hour, covering 600 miles in just 12 hours. The hurricane destroyed power lines, automobiles, boats, and trees; killed thousands of cattle and chickens; and wiped out half of the region's apple crop. Rainfall and surge submerged communities along the coast in floodwaters that were measured up to 13 feet high.
Galveston Hurricane (1900)
The City of Galveston is situated on Galveston Island, where the highest elevation is 8.7 feet. In 1900 Galveston was the largest city in Texas—a prosperous, booming metropolis of some 40,000 people. It was the state's chief trading port and, with more than 70 percent of the national cotton crop passing through it, the chief port for the lucrative cotton trade. The hurricane that struck Galveston on September 8, 1900, is the deadliest natural disaster in the history of the United States, with an estimated 8,000 to 12,000 lives lost. Lacking any of our modern early warning systems, there was no time to prepare or evacuate. The storm made landfall as a Category 4, with sustained 135 mph winds. The highest gust wind speed recorded was 150 mph and the lowest central pressure was 936 mb.
The greatest damage stemmed from the 15-foot storm surge that washed over the low-lying harbor town, which destroyed more than 3,600 homes and wiped out bridges and telegraph lines. On September 12 the storm tracked to New York City, where 65 mph winds were recorded. By the time it dissipated over the Atlantic, the storm had caused more than $20 million (1900 currency) in damage across the United States.
Galveston Hurricane of 1915
In the wake of the 1900 hurricane, the City of Galveston built the Galveston Seawall to mitigate the city's vulnerability to deadly storm surges—a precaution that saved many lives when another hurricane made landfall there just 15 years later. Moving from south of Puerto Rico and tracking past Cuba, this unnamed storm was a Category 3 at landfall on August 17, with an atmospheric pressure of 940 mb and maximum sustained winds at 127 mph—strong enough to border on a Category 4.
Around 90 percent of the homes on Galveston Island were destroyed outside of the protection of the seawall, and although 275 people died throughout the state, only 11 deaths occurred in the City of Galveston. Several hundred boats were wrecked along the Texas and Louisiana coasts, with one getting its anchor caught on the seawall itself and being dashed to pieces. The causeway to the mainland was destroyed, limiting access to help and repairs.
After leaving Galveston, the storm passed by Houston as a Category 1 hurricane, and then dropped to tropical storm status within 12 hours of landfall. As it moved farther northeast over Texas, it wiped out most of the cotton crop and significantly damaged the corn and rice crops with 20 inches of rain. The storm continued through Missouri, and even to New York, bringing heavy rain that caused damaging flash flooding.