The U.S. continues to experience severe weather events of escalating magnitude and frequency. As a result, damaging winds, tornadoes, and hail storms are impacting a larger swath of the nation, in turn driving up personal and commercial property claims, among other things.

During the past 2 years, hail-related damage claims jumped 84 percent, based on findings released today from the latest National Insurance Crime Bureau (NICB) ForeCAST report. When analyzing hail loss claims filed from January 1, 2010 through December 31, 2012, the NICB counted more than 2 million. When broken down by year, there were 467,602 hail damage claims filed in 2010, followed by 689,267 in 2011, and then 861,597 in 2012.

Hail Claims Up 84% on More Frequent, Severe Storms

Member companies referred a portion of these hail loss claims to NICB for closer inspection because of certain characteristics that might indicate anything from inflated damages to outright deception. What were the most common referral reasons, and which states reported the most hail damage overall? Find the answers and learn about other trends the NICB uncovered by clicking “Next” at the bottom right.

6. Outbreak of More Severe Storms

Mother Nature proved to be a formidable mistress, battering the U.S. with numerous hail events that produced extensive damage, leading to a barrage of personal and commercial claims. The NICB identified a total of 2,018,466 hail-related damage claims with a loss date from January 1, 2010 through December 31, 2012.

During this two-year period, the largest number originated in Texas, which generated a total of 320,823 hail loss claims. In 2010, 2011 and 2012, Texas saw 557, 741 and 795 hail events, respectively. (Claims activity follows the hail storm activity as posted on the National Weather Service's Storm Prediction Center).

(Texas storms, AP photo/Mike Fuentes)

5. Hail is BIG in Texas

Trailing behind the Lone Star State for the most hail loss claims from 2010 to 2012 is Missouri, with 138,857 and Kansas, with 126,490. Also rounding out the list of the Top 10 states with the largest combined total of hail loss claims are Colorado (118,118); Oklahoma (114,168); Illinois (107,772); Tennessee (92,253); Indiana (91,054); Arizona (88,456); and Kentucky (77,839).

These ten states represent 63 percent of the total hail loss claims. Texas accounted for 16 percent of the total claims during the specified timeframe.

4. Seasonal Differences

Most hail loss claims sprout up in the spring and summer months, between March and July. This is likely due to increased numbers of thunderstorms during this time period, the NICB noted. Research performed at the NOAA supports these findings. Between 2010 and 2012, NOAA hail reports were found to be most numerous in April, May, and June, which is reflected in the monthly averages of hail loss claims.

3. QC Referrals Up Slightly

Despite the overwhelming rise in hail-related damage claims overall, the number of related QCs submitted to NICB for closer inspection was more subtle. In total, 3,829 QCs, designated with a loss type of “hail,” were reported between January 1, 2010 and December 31, 2012. Hail loss QCs decreased 4 percent between 2010 and 2011, then increasing 4 percent between 2011 and 2012. Once again leading the way, Texas was the state with the largest combined total of hail loss QCs, followed by Illinois, Colorado and Arizona. The top ten states on the list represented 76 percent of the total hail loss QCs during the 2010-2012 timeframe. For instance, Texas reported 1,053 QCs, or 28 percent of the total number of QCs between January 1, 2010 and December 31, 2013.

2. Homeowners Under Suspicion

Of the top five policy types identified in hail loss QCs from 2010 through 2012, “personal property homeowners” (PPHO) raised the most eyebrows, with 2,546 total QCs. This represented 66 percent of the total number of hail loss QCs. The remaining four policy types (in descending order in terms of total QCs) are personal auto (PAPP); personal property/fire (PPFR); personal property/other (PPOP); and commercial property (CPMP).

1. Deceptive Appearances

Typical property damage from hail events can be as minimal as a few broken shingles or can amount to the decimation of multiple buildings. Such a wide range can present the adjuster with unique challenges when making complex damage assessments. It can also open the door to deception, from “soft” fraud to outright deceit.

Of course, the fact that a claim has been referred to NICB does not automatically indicate fraud or malcontent on the part of a policyholder or vendor. While each QC must have at least one referral reason listed, it may contain as many as seven reasons.

For hail-related QCs submitted from 2010 to 2012, the most common referral reasons were:

Hail damage
Vendor fraud
Catastrophe – hurricane, tornado, hail, wind, or fire
Prior loss/damage
Inflated damage

Files referred to NICB for “hail damage” accounted for 3,187 QCs.

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