In Ohio, 2012 Was Second-Costliest Year Ever in Insured Losses

New rankings from the Ohio Insurance Institute (OII) show that several catastrophic weather events in 2012 made it the second-costliest year in insured losses for the state.

Storms in March, June and July—with the latter two called summer derecho storms—and Superstorm Sandy contributed to the $1.15 billion in annual insured losses for Ohio. Last year was outranked only by 2008, when Hurricane Ike struck and about $1.33 billion in insured losses was recorded for the year.

Insurers should note that five of the top 10 years with the highest insurance-related losses were in the last half-decade, according to Mary Bonelli, a spokeswoman for the institute. Other notable weather events during that period included a hailstorm in June 2007 and spring storms in May 2011 that both caused hundreds of millions in insured losses.

“Storms are coming in higher frequency and severity in the last five years and it’s pretty alarming,” she said.

Most of last year’s insured losses for the Buckeye State came from summer “derecho” storms that struck in late June and early July. OII estimates from those storms were at around $440 million last year but were revised this week to $845 million.

The “derecho” storms caused $56 million in car insurance-related losses, or about 6.6 percent of total losses from those weather events, according to numbers provided by Verisk Analytics and Property Claim Services (PCS) to Online Auto Insurance News (OAIN).

Around 20,000 auto insurance claims were submitted relating to the storm, meaning the average claim size for auto damage was about $2,800.

Superstorm Sandy generated 4,000 auto-related claims in Ohio for a total of $12 million and average claim size of about $3,000, according to PCS and Verisk Analytics.

Back-to-Back Weather Events Brought Storms of Thunder, Hail

According to the National Weather Service, a faster-than-normal set of expansive thunderstorms, which meteorologists call “derecho” storms, raked across 600 miles of Ohio in 10 hours before they were declared a natural disaster by federal authorities on June 30 last year. Counties in eastern Ohio reported tornadoes.

On July 2, Ohio saw another set of thunderstorms that hit southwest areas of the state like Miami County. Ross County in central Ohio reported hail the size of baseballs.

Initial OII estimates were complicated by storm systems’ back-to-back occurrences, according to Bonelli, who said that OII’s initial lower estimate was based on situations that were only recently resolved.

“There were trees that were affected by the initial storm,” Bonelli said in an interview with OAIN. “But by July when the second storm came through, it was the second storm that actually caused the loss and brought those trees down.”

If the damage described by Bonelli above was linked to a car, it would be covered by an insured’s comprehensive coverage portion of an auto coverage policy. Comprehensive coverage covers weather-related events such as strong winds forcing trees down onto a vehicle and hailstorms that break car windows.

Also, Bonelli said that the insured losses were revised to the higher figure because the institute’s initial estimates were combined with insured losses compiled by PCS, which came from a larger pool of Ohio insurers. The OII had said in August last year that its estimates were likely lower than actual losses.

Ohio was the only state that sustained major storm damage from both systems, according to Bonelli.

About Charles Nguyen
Charles Nguyen is an enterprising journalist who reported for Patch.com 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.

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