Aerial view of Fukushima nuclear power plant (Creative Commons).

The current insurance payout record for an earthquake goes to the 1994 Northridge quake, which saw $22.5 billion in insured losses in 2010 standards, according to Robert Hartwig, president of the Insurance Information Institute.

"Thirty-five billion would make this earthquake by far the most expensive in global history," Hartwig said.

Most of the insurance losses associated with the disaster will be paid by Japanese companies.

The AIR Worldwide estimate of $35 billion dwarfs that of risk modeling firm Eqecat, which estimates insured losses at $12-25 billion.

NPR reports that at least 10,00 people are confirmed missing or dead from the quake and subsequent tsunami, so there will be life insurance payouts as well:

For homeowners who had earthquake coverage, there will be money for residences that were heavily damaged or destroyed. Those claims will be paid by individual carriers, backed up by an industry pool and the government itself.

Business losses will be handled differently — there is no insurance pool or government backup funding. But private insurers are likely to get help from their own insurance policies, known as reinsurance.

"The insurance companies will take on risk and then they'll farm that risk out to reinsurance companies as a mechanism for spreading risk around as much as they can," says Michael Paisan, an analyst for Stifel Financial Corp.

Even at the highest estimates, damages from the Japan earthquake, tsunami and nuclear crisis fall far behind the total insurance claims from Huricane Katrina in 2005.

The largest loss in the history of insurance, Hurricane Katrina tallied up a total of $40.6 billion in insurance claims.

Thus far, insurance companies have shelled out roughly $1.7 million for damaged to houses, businesses and vehicles.
--

--

To reach Benjamin Gottlieb, click here.

Follow him on Twitter @benjamin_max.