Disaster relief
January 5, 2013![A destroyed house sits atop its own wreckage against a blue-sky backdrop. (Photo: Miodrag Soric)](https://static.dw.com/image/16403812_800.webp)
Munich Re, the world's largest re-insurer, had little good news to report in its January 3 wrap-up of disasters in 2012. Hurricane Sandy, droughts in the American Midwest, an Italian earthquake, a series of Midwest tornadoes and Typhoon Bopha in the Philippines were just five of the more than 900 events worldwide that caused $160 billion-worth of damage (122 billion euros) to the worldwide economy.
Since 2006 it has been rare for worldwide disasters to number under 900 in any given year. This is in stark contrast to the 1980s, when a terrible year might have seen a mere 500 disasters.
The 2011 Great East Japan Earthquake which led to the explosion at the Fukushima nuclear reactor became the most expensive disaster in history. So far it has cost $235 billion (180 billion euros). Hurricane Katrina in 2005, which left much of New Orleans under water, comes in at second at $81 billion.
Insurance companies bear a large part of these costs. But of Hurricane Sandy's estimated $60 billion price tag, only $25 billion was actually insured. And on top of their financial losses, those affected may also suffer long-lasting personal and emotional damage.
Around the world, more people than ever are requiring financial assistance - through private insurance, public insurance or government aid - to rebuild their lives. The question is, will they get it?
FEMA's responsibilities
61-year-old Betty Ann Fuller is a case in point when it comes to the complexities of reclaiming losses. Since Hurricane Sandy destroyed her home in October 2012, she has received just two payments of $1,410 dollars for living expenses. Those came from the Federal Emergency Management Agency (FEMA). Some of the groceries she purchased then spoiled when her hotel lost power.
She is still waiting for insurance payments from her private insurer: $223,000 for the house, $31,000 for lost rent, and $1,500 for out-of-pocket expenses. "I had to tally every stinkin' thing in my house, including the toilet paper," she says. Her private insurer is based in New Jersey.
Two weeks after evacuating and moving into a local hotel, she was picked up by a bus and taken back to her property. "The Red Cross was there with a truck to give us some meals," she says. "They were handing out meatloaf dinners. They were very visible and helpful."
As for government assistance, Betty Ann Fuller has nothing but praise. "I am very, very pleased with FEMA - their support groups with regard to insurance, mental issues, any subject related to loss," she says. "They are right there in our town, you can go to them anytime, talk to them, and they help you."
That help was recently endangered. While US Congress ultimately approved $9.7 billion in borrowing power for FEMA on Friday (04.01.2013), the congressional bickering left a sense of doubt in New Jersey as to whether the US government can be counted on to provide adequate funding in times of crisis.
"I'm disappointed in the federal government right now - with what's going on in Congress and the Senate," Fuller said.
A FEMA spokesperson told Deutsche Welle that FEMA's National Flood Insurance Program is having difficulty covering costs: "There are more claims than there are premiums coming in."
Preparing for future catastrophes
Dr. Robert P. Hartwig, president of the New-York-based Insurance Information Institute, is keen to reassure desperate homeowners, while also distancing private insurance from its public equivalent.
"It should be known that there is no 'fiscal cliff' in the property-casualty insurance or reinsurance industry," Hartwig says in an online seminar. "The industry makes sure that it has the resources in the bank before a disaster occurs. It is not something to be reckoned with afterwards, and that is a responsibility that insurers and re-insurers around the world take very seriously."
Another important approach is to find new ways of limiting potential damage. Carl Hedde, head of risk accumulation at the Munich-based Munich Re, hopes to be able to better prepare homeowners - and homes - before events occur.
"Over the last couple of years the Institute for Business and Home Safety has built the world's largest research facility in South Carolina. We're supporting the testing of building codes, and we've also tested building materials."
Measures like these could help to save houses like Betty Ann Fuller's. After being battered by wind and rain, her home was ultimately destroyed by a fire that swept through 30 houses.
"I have no family, so I lost my whole life," she told Deutsche Welle. "When I left the house I took three days' worth of clothing, a picture of my mother and father, and my son's ashes. My son passed away in 2007 at the age of 25. All of his diaries and personal effects were still packed and I never got to put them away, and I am devastated that I lost all that."