We tend to think about insurance from our perspective. We may not always like paying our monthly premium, but we appreciate the peace of mind that comes from knowing we are protected when something terrible (and expensive) happens to ourselves, our cars or our homes.
But let’s consider for a moment the perspective of the insurance company. To exist as a business, they need to make a profit, and to make a profit they need to take in more money in premiums than they pay out in claims.
Before deciding how much you will pay for your insurance, they carefully weigh the potential risk factors. If it’s home insurance they’ll look at where you live and the likelihood that certain perils (hurricanes, hail, snow) will cause damage to your home. If it’s car insurance they’ll consider factors like your age, driving history and, again, where you live, to predict how likely you will be to file a claim.
If they price it well, insurance companies should be able to make money, while still paying out for expected claims. However, sometimes things go very wrong. Below are some of the biggest disasters in U.S. history (in terms of insurable losses) in the last 30 years and how they impacted the insurance industry. (Spoiler: many of them are hurricanes.) These are listed chronologically.