HLDI: Frequency of Hail-Damage Claims Doubled in 2011

The rate at which Americans filed hail-related vehicle damage claims in 2011 was more than double that seen during each of the three preceding years, according to a recent analysis from the Highway Loss Data Institute (HLDI).

There were 5.9 such insurance claims per 1,000 vehicles in 2011, according to the data, compared with 2.7 claims per 1,000 vehicles the year before.

The analysis, which culled data from about 750,000 claims, also found spikes in the total number of claims and claim payments but a drop in the average payment per claim.

The 244,800 hail-related insurance claims in 2011 were far higher than in 2010, when there were 158,200 such claims. Last year’s figures also outnumbered those from 2008 and 2009, when there were around 170,000 claims each year.

The total dollar amount paid out to policyholders for hail-related claims in 2011 saw a 32.7 percent jump from the previous year. The $797 million in claim payments in 2011 was far higher than figures from 2010, 2009 and 2008, when insurers’ payments were between $471 million and $536 million.

The payment on each claim saw a minor dip in 2011, falling to $3,256 from $3,389 in 2010.

Hail Claims Concentrated in Midwest

Statistics from the last four years show that South Dakota, Nebraska, Kansas and Oklahoma have consistently high numbers of hail-related claims, according to the HLDI.

However, the numbers show a wide range from year to year. Montana, last year’s leader in claim frequency, fell to 22nd this year. 2011’s leader in claim frequency, Wyoming, ranked 3rd in 2010 but was 14th and 18th in 2009 and 2008, respectively.

In 2011, the top 10 states in frequency of hail-related claims were:

1. Wyoming

2. South Dakota

3. Nebraska

4. Kansas

5. Iowa

6. South Carolina

7. Missouri

8. Arkansas

9. Oklahoma

10. Tennessee

If a policyholder lives in an area showing higher number of hail-related claims and has inexpensive car insurance lacking comprehensive coverage, they should strongly consider purchasing the optional form of insurance to protect themselves against noncrash-related losses from hail, tornadoes or other weather-related phenomena.

Methodology Used for Weather Data

To compile its analysis, the HDLI cross-referenced insurer data with weather data from the National Oceanic and Atmospheric Administration (NOAA).

The higher-than-average results were especially surprising because the findings excluded the last two months of 2011 due to a lack of NOAA data at the time of the analysis.

About Matthew Morisset
Matthew Morisset is a proud alumnus of the University of Redlands, where he obtained a degree in English Literature. Utilizing his passion for analysis and writing, Matthew looks for important trends in the auto insurance industry and their implications for consumers and the market as a whole.

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