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The Triple Whammy

Had the earthquake, resultant tsunami, and nuclear disaster that occurred in Japan happened in the U.S., the vast majority of homeowners and companies suffering losses would find little help from their insurers.

By Ken Brownlee, CPCU | Updated on May 01, 2011

When the star right fielder hits a triple, batting in three runs, the baseball crowd goes nuts. When a race horse wins the Triple Crown, big bucks pour in to the owner for stud fees, and when Mom delivers triplets, it’s both exciting and frightening for the parents, who can expect virtually no sleep for the next 6 years. Drunk driving is a less appealing triple whammy: a totaled vehicle, lawsuits from injured parties, and a jail term. But when the triple whammy hit northern Japan March 11, governments and insurers around the globe began to take a new look at their own risks.

Had the earthquake, resultant tsunami, and nuclear disaster that occurred in Japan happened in the U.S., the vast majority of homeowners and companies suffering losses would find little help from their insurers. Such disasters are simply too big and expensive to represent an insurable peril. It is basic Insurance Theory 101: the potential peril must be calculable and of a nature that will not strike a large number of insureds at the same time.

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