Workers have begun clearing debris from the Francis Scott Key Bridge in Baltimore, which collapsed after a container ship hit one of the support pillars. Analysts said the port's cleanup is expected to cost millions of dollars. reuters that “insured losses could range from $2 billion to $4 billion,” potentially making it the largest marine insurance loss in history.
Questions are rising over who will cover the costs of the Key Bridge disaster, with the Singapore company that owns the container ship likely to pursue liability claims. But this certainly wouldn't be the first time insurance companies have had to open their checkbooks. Here are the five largest insurance payouts in American history.
1. Lehman Brothers – Over $115B
No institution measures the massive fallout of the 2008 financial crisis quite like Lehman Brothers, when the shuttered investment bank suffered what is believed to be the largest insurance payout in history. Amid the collapse of the global economy, Lehman Brothers filed for bankruptcy in 2008 and insurance began paying claims from thousands of customers. This continued for 14 years until 2022, when the Securities Investor Protection Corporation announced “(Lehman Brothers) returned more than $115 billion to customers and creditors.” Most of it went back to former Lehman clients, who “received $106 billion, fully satisfying the claims of 111,000 clients.”
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2. 9/11 – $50B
The true financial cost of the 9/11 terrorist attacks may never be known – and for many people, the physical and emotional toll of that day is impossible to assess. However, immediately after the attacks, insurers had to attempt to place a value on each life lost, a laborious task depicted in the 2021 film “Worth.” The average death penalty award during 9/11 was $1.44 million, according to Justice Department, while “personal injury awards ranged from $5 to $6.8 million.” Overall, “insured losses resulting from the 9/11 attacks were approximately $50 billion in 2021 dollars, including commercial liability and group life insurance claims,” Insurance Information Institute (III) Said.
3. Hurricane Katrina – $41.1B
Nearly 20 years later, parts of the Gulf Coast are still feeling the effects of Hurricane Katrina, which devastated New Orleans and the surrounding area. Katrina not only resulted in “massive destruction and significant loss of life”. National Weather Service But it also remains “the costliest hurricane ever to hit the United States”, responsible for approximately $108 billion in damage. Five years after Storm, III released a report concluding that Katrina “generated the largest single loss in the history of insurance (at the time) – $41.1 billion and more than 1.7 million claims – in six states. The majority of these payouts – 63% – occurred in Louisiana.
4. Hurricane Sandy – $36B
Like Katrina, Hurricane Sandy caused widespread devastation along the Eastern Seaboard in 2012, particularly damaging large parts of New York and New Jersey. Total insurance payouts from the hurricane are estimated to be approximately $36 billion. Several years after the hurricane struck, private insurance companies associated with the disaster were accused of widespread fraud. This “prompted the nation's flood insurance program to reopen the claims process for thousands of Superstorm Sandy victims,” it said. pbs frontline, More than 1,600 homeowners filed suit for additional compensation, resulting in “over $240 million” in additional funds being awarded.
5. Tohoku earthquake and tsunami – $35B
The 2011 earthquake that struck the Tohoku region of Japan is considered one of the most powerful earthquakes ever recorded. The earthquake and subsequent tsunami caused approximately 20,000 deaths and billions of dollars of property damage – and this was all before the Fukushima nuclear disaster caused a natural disaster. This polluted the area with the release of radioactive waste and resulted in even more insurance claims. Overall, the earthquake and tsunami cost approximately $35 billion, and “does not include damage from the malfunctioning reactors at the Fukushima Daiichi Nuclear Power Plant,” kbps That said – which means the actual value of the insured payout could be even higher.
