Insurance claims stemming from hail-related damage have increased markedly in the past two years, according to the National Insurance Crime Bureau (NICB). In its latest ForeCAST report, NICB points to an 84-percent rise in the number of claims logged in 2012 compared to that in 2010. To put things into perspective, 467,602 hail damage claims were filed in 2010, followed by 689,267 in 2011, and then 861,597 in 2012.
It’s no secret the nation has experienced severe storms of escalating magnitude and frequency. These storms have produced damaging winds, tornadoes, hail that have affected a larger swath of the U.S. The reason these storms are occurring in rapid succession is a subject of contentious debate, yet their far-reaching impact is clear—extensive property damage and, by extension, a mound of personal and commercial p&c claims.
Typical property damage from hail events can be as minimal as a few broken shingles or can amount to the decimation of multiple buildings. NICB’s report, which focuses solely on insurance claims resulting from hail damage, not loss of life, is divided into two sections. The first analyzes overall U.S. hail loss claims from 2010 through 2012, whereas the second section examines hail loss questionable claims (QC) submitted during the same timeframe.
Millions of Hail Damage Claims
One of the most dramatic takeaways in NICB’s overall assessment is the sheer volume of claims processed by its member companies. In fact, more than 2 million hail damage claims were processed from January 1, 2010 to December 31, 2012. During this period, the largest number of claims originated in Texas, which logged a total of 320,823. In 2010, 2011 and 2012, Texas saw 557, 741 and 795 hail events, respectively. NICB notes that claims activity follows the hail storm activity as posted on the National Weather Service’s Storm Prediction Center. Trailing behind the Lone Star state is Missouri, with 138,857; Kansas, with 126,490; Colorado, with 118,118; and Oklahoma, with 114,168.
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.
For a list of the Top 5 QC referral reasons and to access more highlights of the report, view the accompanying PC360 slideshow.