The high cost of hurricanes

As Hurricane Earl heads towards the east coast of the U.S., the damage it could cause is a stark reminder of the costs of natural disasters.

Hurricane Earl is making its way through the Caribbean, and is now headed towards the US coastline- leaving behind a path of destruction and bills to pay.

The total costs of natural disasters like hurricanes can be tough to quantify- because their impact is so wide- from direct costs like physical damage to a community- to higher insurance costs down the road- to potential tourist dollars that blow away with the wind.

Professor Lori Pennington-Gray of the University of Florida:

SOUNDBITE: PROFESSOR LORI PENNINGTON-GRAY, UNIVERSITY OF FLORIDA, (ENGLISH) SAYING:

"And that in turn also has effects on other economies, you"re real estate economy is effected by it, people might not be able to buy a second home there, if they are moving to the area it may hold up new businesses moving into that region as well."

There is no way to know how much damage Earl could do, but it would be hard to top Katrina- which in 2005 caused $81 billion dollars in damage and was the deadliest in US history- according to the National Hurricane Center.

About half of that, $41 billion in 2005 dollars, were insured losses according to the Insurance Information Institute.

And statistics show the costs of natural disasters like hurricanes are rising- as Americans continue to build communities in high risk areas.

Molly Helmuth is a Director at International Research Institute for Climate and Society at the Earth Institute at Columbia University.

"We"ve actually seen an increase, a five-fold increase in economic losses over the last 30 years due to disasters and actually the statistical evidence shows that the increase in losses is actually due to increased exposure. So you are seeing increases in wealth and development and population increases and particularly in areas that are high risk like coastal areas."

Helmuth says short of moving away from the high risk areas, costs can be dramatically reduced if communities prepare in advance.

Something many talk about, but few successfully do before the storm rolls in.

Bobbi Rebell, Reuters