As we watch the tragic news footage it is hard to imagine what the Japanese people are going through. At Downey Insurance we are feeling such sadness, and our hearts go out to all to the people who are injured, grieving and displaced in Japan. Also to our friends and client The Boston Japanese Christian Church in Somerville, MA who may have lost friends and family in the disaster. With the new threat of Nuclear Meltdown imminent, Japan is going to need our help now and most likely for years to come. After the U. S. experienced the most expensive hurricane “Hurricane Katrina” the Japanese people opened their hearts and wallets to help the United States when we were in need.
From a Washington Press Release in 2005-”Washington — If the saying “a friend in need is a friend indeed” is true, Japan is one of the best friends the United States ever could have to provide support while so many Americans are suffering in the aftermath of Hurricane Katrina.
Japanese private citizens and the government alike have sent a virtual tsunami of assistance to the victims of Katrina, which devastated 90,000 square miles along the U.S. Gulf Coast in August. Hundreds of thousands of people lost their homes and hundreds lost their lives.
Japan has pledged more than $1.5 million in private donations. The government of Japan has donated $200,000 in cash to the American Red Cross and some $800,000 in relief supplies — from blankets to generators — already are arriving to aid the most needy. Japanese firms with operations in the United States have donated some $12 million in total, including Honda Motor Corporation ($5 million), Hitachi ($1 million) and Nissan (more than $750,000).”
I think it is unclear at this time how high the cost of rebuilding Japan will be. At the moment it is on track to be the largest earthquake loss on record.
From NPR.org – “It’s hard to fathom the extent of the earthquake and tsunami damage in Japan, and losses continue to mount. While most of the property damage won’t be covered by insurance because many people and companies didn’t have earthquake coverage, the insurance industry’s exposure is still huge.
Claims stemming from the earthquake in northern Japan and its aftermath are likely to make this one of the costliest natural disasters ever for the insurance industry.
One widely used estimate puts the insured losses at $15 billion to $35 billion — and that doesn’t include losses stemming from the crippled reactors at the Fukushima Dai-ichi nuclear power plant.
“Thirty-five billion would make this earthquake by far the most expensive in global history,” says Robert Hartwig, president of the Insurance Information Institute.
Historic Payouts
The current insurance payout record for an earthquake was set in the 1994 Northridge earthquake in California, which produced $22.5 billion in insured losses in 2010 dollars, he says. Hurricane Katrina was the costliest disaster, with total insurance payouts of $41.1 billion, the institute says.
Most of the insurance losses stemming from last week’s earthquake will be paid by Japanese companies.
At least 10,000 people are confirmed dead or missing, so there will also be life insurance payouts”
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