NICB: Number of U.S. Hail Claims Up 84% in Last Three Years

The number of hail claims jumped steadily across the U.S. in each of the last three years, largely because of huge jumps in auto-related claims, according to a new report from the National Insurance Crime Bureau (NICB).

According to the report, which analyzed data from the Insurance Service Office (ISO) and the bureau itself, there were 467,602 hail loss claims in 2010 and 861,597 hail loss claims in 2012, an overall increase of 84 percent.

There was a 47 percent increase between 2010 and 2011. The NICB attributed the year-after-year spikes in hail claims to “severe storms that are occurring with more intensity and affecting more areas of the country.”

“Recent trends indicate that these types of storms have only proven to be more widespread and costly,” according to the report.

Hail hit hardest from late-spring into early-summer months, with the highest average number of claims between 2010 and 2012 coming in the month of April.

Nearly Quarter of Hail Claims Is Auto-Related

Between 2010 and 2012, claims for personal auto policies made up nearly 1 out of every 4 hail-related claims, the second-largest kind of hail claim when categorized by policy type.

Personal homeowners policies led all policy types, representing more than 6 out of every 10 claims in that period.

However, hail claims for personal auto policies have been increasing at a much faster rate between 2010 and 2012 than those filed under any other policy type.

There is a colossal 528 percent difference between the 51,345 hail claims for personal vehicles in 2010 and the 322,719 hail claims for that policy type last year.

Hail claims under homeowners policies saw an increase of only about 30 percent in that time.

Frank Scafidi, spokesman for the NICB, said that the Bureau had no explanation for the comparatively fast increase of hail-related claims for cars and that “that’s just what the numbers bear out.”

“Could it be because the storms are getting more severe? Or that vehicles are more susceptible to damage?” Scafidi told Online Auto Insurance News (OAIN). “All of that’s entirely possible, but there’s nothing in the data that we can point to that pinpoints a reason [to why auto claims are increasing at a faster pace].”

A report from the Highway Loss Data Institute (HLDI), released last April, showed that the number of comprehensive coverage claims filed for vehicles in 2011 was more than double compared with the preceding three years.

Hail damage to vehicles are covered under comprehensive coverage, which protects a policyholder against weather-related events as well as other-than-collision incidents like theft and vandalism.

Texas Tops Other States in Hail Claims

Texas has been the site of the most hail claims nationwide each of the past three years, according to the report.

Texas also outpaced all other states by far when looking at the number of hail claims in the entire three-year period, making up 16 percent of those claims nationwide in that time.

Here are the states with the top five highest number of hail claims between 2010 and 2012 and their respective shares of all U.S. hail claims for that period:

–Texas, 16 percent
–Missouri, 7 percent
–Kansas, 6 percent
–Colorado, 6 percent
–Oklahoma, 6 percent

Last year, Texas insurance regulators reported that the largest amount of losses between 1999 and 2011 was due to hail, more than the losses from hurricanes and tornadoes combined. State officials in the Lone Star State called a “War on Hail” symposium last fall to bring awareness to the issue.

“There was a recognition that while storms like hurricanes and tornadoes get a lot of media coverage, it was hail that was actually causing the most damage when looked at in the aggregate,” Ben Gonzalez, a Texas Department of Insurance (TDI) spokesman, told OAIN about the reason for last year’s symposium.

Colorado, listed as one of the states with the highest number of claims, was struck by destructive hailstorms last June that caused tens of millions of dollars in vehicle damage. The recent NICB report highlighted the weather event and said that total damage surpassed $1 billion.

That same summer, Ohio was hit with hail powered by wind gusts as high as 100 mph. The damage from those “derecho” storms was followed days later by more hail and high winds.

Major hailstorm-related events this year included harsh weather in Mississippi in March, when regulators reported hundreds of millions of dollars paid for tens of thousands of Mississippi auto insurance claims from record-breaking hailstorms.

The storms there were so severe—some hailstones were reportedly as large as softballs—that the most common claims-related questions that regulators received were about total-loss vehicles.

Mississippi, however, was not ranked in states with the top 10 number of hail claims.

Tips for Hail Protection, Recovery

The aforementioned comprehensive coverage is a valuable purchase for car owners hoping to protect their vehicle against weather-related events like hail. According to Michael Barry, spokesman for the Insurance Information Institute (III), this optional form of coverage “is one of the last you should give up.”

“It’s a comparatively small amount of your auto insurance bill but covers a lot of events, especially weather that can be unpredictable,” Barry told OAIN.

TDI’s Gonzalez said that drivers should be aware of forecasts and consumer alerts about weather. When forecasts predict hail, he said, car owners should act.

“Move your car inside if it’s possible, under solid covering and away from trees so your car isn’t damaged,” he said.

Texas Also on Top in Number of Questionable Hail Claims

Texas also generated the highest number of questionable claims (QCs) about hail damage out of all states in that time.

QCs are claim referrals that the NICB receives from insurance companies when those insurers find a claim to be dubious.

According to the Bureau, 28 percent of all hail-related QCs came from Texas between 2010 and 2012.

More than one 1 of every 4 QCs is from a personal auto claim, the report said.

About Charles Nguyen
Charles Nguyen is an enterprising journalist who reported for and the Desert Dispatch and was the editor in chief of the Guardian (the twice-weekly newspaper at the University of California, San Diego) before coming to Online Auto Insurance News.

No comments yet.

Comment on this article