Texas Hailstorms Outpace All Weather Types in Insurance Losses

Insurers joined with Texas officials and weather experts at Tuesday’s “War on Hail,” the state’s first-ever symposium fostering discussions on the type of weather event that the Texas Department of Insurance (TDI) says has caused the highest losses in the past dozen years.

Hurricanes and tornadoes tend to grab the most attention from the media and public, but while both accounted for almost $10 million in insured losses ($6.6 million from hurricanes, $3.1 million from tornadoes) between 1999 and 2011, hail damage caused $10.4 million in insured losses. Combining wind and hail produces a $20.2 million insured-loss figure, dwarfing the hurricane-tornado total and leading all kinds of weather losses during that time period, according to the TDI.

Report: Hail Claims on Upward Trend Across U.S.

Nationwide, auto claims rates for hail damage more than doubled between 2010 and 2011, according to a Highway Loss Data Institute (HLDI) report released this past summer. The report also found that the 244,800 claims filed in 2011 for hail-caused car damage outnumbered the volume of claims in 2010, 2009 and 2008.

At the same time, those claims are costing more in total: the $797 million in claims payments in 2011 was 48.6 percent higher than the year before it.

The Lone Star State showed the 11st-highest claim rate, according to the report, along with the third-priciest hail losses in 2011 with about $61.5 million, trailing New York ($73.3 million) and Illinois ($70.2 million).

The concept behind “War on Hail” stemmed from high hail loss figures that caught Texas officials’ attention, according to TDI spokesman Ben Gonzalez.

“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,” he said in an interview with Online Auto Insurance News.

Texas Hail Hits Hardest in Spring

“War on Hail” was hosted as Texas hits the end of hurricane season in an effort to avoid “hail events going on at the same time,” according to Gonzalez.

“But springtime will bring the hail,” he said.

Hailstorms intensify between April and July, with areas in North Texas often being the hardest hit by such weather.

“Traditionally, there is a kind of hail belt that hits the Texas Panhandle and goes down through the Dallas-Fort Worth area,” Gonzalez said. “But, actually, that’s just where it’s concentrated because there is not an area of Texas that isn’t hit by hail.”

A case in point was the city of McAllen in South Texas, which was struck by a hailstorm in March.

“Having that kind of hail there was very rare but still pretty severe,” Gonzalez said.

Another hailstorm hit Plano, Texas, in June before moving into east Dallas. National Weather Service estimates put total losses at more than $900 million. The state also saw an April storm system bring hail and tornadoes that caused $400 million in losses, according to the Insurance Council of Texas.

Advice for the Insured

Comprehensive coverage protects policyholders against damage from weather events, and it’s something Texas auto insurance policyholders should strongly consider given that so many parts of the state are exposed to hail.

About 75 percent of consumers opt to buy comprehensive insurance, according to the Insurance Information Institute (III), and the purchase is sometimes well worth it.

“If you talk to agents, in terms of optional coverage, comprehensive is one of the last you should give up,” III spokesman Michael Barry said. “It’s a comparatively small amount of your auto insurance bill but covers a lot of events, especially weather that can be unpredictable.”

Methods of mitigating damage were discussed at the Texas “War on Hail” conference, which drew more than 300 attendees, Gonzalez said.

“When it comes to auto protection, the key is to pay attention to warnings from weather professionals,” he said. “When you see them, move your car inside if it’s possible, under solid covering and away from trees so your car isn’t damaged.”

The conference also touched on the vulnerability of car dealerships during hailstorms, according to Gonzalez.

“Sometimes it’s not the building but the parking lot that is most important to protect,” he said.

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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