RJ and Makay

$309 billion. That's the latest estimate by the government of Japan on the cost of the March 11 earthquake and tsunami that devastated the northeastern part of the country.

If the estimate proves correct, the incident in Japan will be by far the most expensive natural disaster in history. Hurricane Katrina, by comparison, which ravaged the New Orleans area in 2005, cost $125 billion, according to the Insurance Information Institute.

With early estimates of the earthquake-related damage in Japan already at $35 billion and likely to go far higher, it could end up being the costliest disaster in history — bad enough even to affect insurance rates in the U.S., industry experts say. Reinsurers in particular are apt to charge more for coverage in the next few months because of the 8.9-magnitude earthquake and tsunami that hit Japan and other Pacific regions a week ago, attorney Marc M. Tract predicts.

The event caused damage as far away as the West Coast of the U.S., though obviously the worst occurred by far in northern Japan, where whole cities and towns were flooded and several nuclear reactors were damaged and began releasing radiation. “I think it will affect U.S. rates ultimately. At some point, someone has to pay," says Tract, a partner and specialist in insurance and corporate law at Katten Muchin Rosenman in New York.