Billion-Dollar Weather and Climate Disasters: Overview
The U.S. has sustained 285 weather and climate disasters since 1980 where overall damages/costs reached or exceeded $1 billion (including CPI adjustment to 2020). The total cost of these 285 events exceeds $1.875 trillion.
2020 in Context…
2020 sets the new annual record of 22 events - shattering the previous annual record of 16 events that occurred in 2011 and 2017. 2020 is the sixth consecutive year (2015-2020) in which 10 or more billion-dollar weather and climate disaster events have impacted the United States. Over the last 41 years (1980-2020), the years with 10 or more separate billion-dollar disaster events include 1998, 2008, 2011-2012, and 2015-2020.
Methodology and Data Sources
The National Centers for Environmental Information (NCEI) is the Nation's Scorekeeper in terms of addressing severe weather and climate events in their historical perspective. As part of its responsibility of monitoring and assessing the climate, NCEI tracks and evaluates climate events in the U.S. and globally that have great economic and societal impacts. NCEI is frequently called upon to provide summaries of global and U.S. temperature and precipitation trends, extremes, and comparisons in their historical perspective. Found here are the weather and climate events that have had the greatest economic impact from 1980 to 2020.
In 2012, NCEI -- then known as National Climatic Data Center (NCDC) -- reviewed its methodology on how it develops Billion-dollar Disasters. NCEI held a workshop with economic experts (May, 2012) and worked with a consulting partner to examine possible inaccuracy and biases in the data sources and methodology used in developing the loss assessments (mid-2013). This ensures more consistency with the numbers NCEI provides on a yearly basis and give more confidence in the year-to-year comparison of information. Another outcome is a published peer-reviewed article "U.S. Billion-dollar Weather and Climate Disasters: Data Sources, Trends, Accuracy and Biases" (Smith and Katz, 2013). This research found the net effect of all biases appears to be an underestimation of average loss. In particular, it is shown that the factor approach can result in an underestimation of average loss of approximately 10–15%. This bias was corrected during a reanalysis of the loss data to reflect new loss totals.
It is also known that the uncertainty of loss estimates differ by disaster event type reflecting the quality and completeness of the data sources used in our loss estimation. In 2019, six of the fourteen billion-dollar events (i.e., three inland floods events, California/Alaskan wildfires, tropical cyclones Dorian and Imelda) have higher potential uncertainty values around the loss estimates due to less coverage of insured assets and data latency. The remaining eight events (i.e., the severe storm events producing tornado, hail and high wind damage) have lower potential uncertainty surrounding their estimate due to more complete insurance coverage and data availability. Our newest research defines the cost uncertainty using confidence intervals as discussed in the peer-reviewed article "Quantifying Uncertainty and Variable Sensitivity within the U.S. Billion-dollar Weather and Climate Disaster Cost Estimates" (Smith and Matthews, 2015). This research is a next step to enhance the value and usability of estimated disaster costs given data limitations and inherent complexities.
In performing these disaster cost assessments these statistics were taken from a wide variety of sources and represent, to the best of our ability, the estimated total costs of these events -- that is, the costs in terms of dollars that would not have been incurred had the event not taken place. Insured and uninsured losses are included in damage estimates. Sources include the National Weather Service, the Federal Emergency Management Agency, U.S. Department of Agriculture, National Interagency Fire Center, U.S. Army Corps, individual state emergency management agencies, state and regional climate centers, media reports, and insurance industry estimates. Please see Calculating the Cost of Weather and Climate Disasters for more information. For more in-depth analysis, the following report offers the latest summary on the 2020 U.S. billion-dollar weather and climate disasters in historical context.