‘2025 is not off to an encouraging start’

Insurance broker Aon assessed that there were $217.8 billion in total economic losses due to natural disasters in the United States in 2024, Insurance Journal reported.

This U.S. figure exceeded the global average and is an 85.3% increase from 2023.

Insurance-covered economic losses rose by 36% last year. However, high-risk homes are increasingly not eligible for home insurance or are too expensive to insure.

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Economic losses from natural disasters represent costs to the economy caused by damage to properties and infrastructure.

Economic losses can include direct losses, such as building damage, destroyed agricultural crops, and bodily harm to storm-affected residents. They may also be indirect and include supply chain disruptions, unemployment, and loss of business revenue.

Why are economic loss figures important?

Economic loss figures are worth calculating because they demonstrate the immense financial strain caused by climate shifts. Estimating past economic losses and predicting future ones impact insurance companies’ ability and willingness to pay claims for natural disaster-related property damage.

Due to exacerbated adverse weather conditions, hurricanes, floods, droughts, and other natural disasters are creating record-breaking economic losses in the U.S. and worldwide. The fragile state of our overheating planet creates concern that economic losses will continue to increase this year and annually.

According to Insurance Journal, “While it’s impossible to predict the timing, location, and losses from natural disasters, 2025 is not off to an encouraging start.”

Aon indicated that the Southern California wildfires in January 2025 will be the most expensive wildfires in American history — and its current record-holder event cost about $12.5 billion in estimated economic damage, per the Associated Press.

How economic loss figures help us take action

Although these economic figures are disheartening, they also offer opportunities to take local action to protect our homes and be prepared for extreme weather events.

In these unpredictable times, it is crucial to pack a go-bag and survival kit equipped with the essentials like drinking water, shelf-stable foods, first-aid supplies, and rechargeable batteries.

Now is also an ideal time to weather-proof your home with upgrades that make your house self-sufficient and resilient if faced with power outages, extreme winds, or fire. Double-pane windows, fortified roofs, and fire-resistant building materials are effective in disaster-proofing a property.

You can also take action by contacting your local representatives to voice your disaster preparedness concerns and encourage policy changes that help your community be prepared for whatever happens next.

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