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“War on Hail” in Texas: Unexpected Weather and Auto Insurance

Last month, Texas officials held a symposium discussing the weather concern that has caused the most losses over the years: hail. While hail doesn’t receive as much news coverage as hurricanes and tornadoes, its total damage in insured losses surpasses hurricanes and tornadoes combined, reaching $10.4 billion in Texas only between the years of 1999 and 2011. This information was gathered by the Texas Department of Insurance. Through the years, hail has become more predominant in weather related claims and the Highway Loss Data Institute reports that claims more than doubled from 2010 to 2011 and those claims

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are costing more as well. In June, a hailstorm rolled through Plano, Texas leaving $900 million in damages estimates the National Weather Service. Hail damage is on the rise in all states, with New York coming in at number one with $73.3 million in damages during 2011.

Windshield broken by hail storm - auto insurance claim

Hailstorm related auto insurance claimed more than doubled from 2010 to 2011

With numbers such as these, it is important for all consumers to revisit their vehicle insurance policies to make sure they are covered when unexpected weather strikes.

The Stats

According to the figures collected by the Texas Department of Insurance damages (paid losses, Billion USD) caused by hail exceeded those of any other element for the reported period of 1999 – 2011. This amounts to a total of over 27% across all weather losses, while the disasters which “enjoy” the most media coverage, Hurricanes (18%) and Tornados respectively Thunderstorms (8%) reach even jointly just 26%.

Texas Paid Losses Billion-US-$
Hail $10.4
Water $8.9
Hurricane $6.7
Fire $5.9
Tornado $3.1
Other $3.0
Paid damages for comprehensive insurance in Texas 1999 - 2011 by type, pie chart

Damages caused by hail in the tracked period exceed all other elements by far.

Hail related comprehensive claims witnessed a massive upswing from 2010 to 2011 by over 54% while payments rose accordingly by nearly the same rate (48.66%) as reported by the IIHS.org (cf. above).

Evolution of insurance claims and payments due to hail 2008 - 2011

Massive upswing in hail related claims and payments during the period from 2010 to 2011

 

Car Insurance that Covers Weather

To cover any kind of unexpected weather costs, be sure to check your policy and ensure that you have comprehensive coverage. When searching for insurance, vehicle damage is usually covered in two forms: collision and comprehensive. Collision covers damage to a vehicle that results from crashing into another object such as a car or light pole. Comprehensive, which can be listed as Other than Collision on your policy statement, covers accidental damage to a car. This includes weather damage. Often, comprehensive coverage will carry a deductible. This is the amount of money that you will pay out of pocket for damages before the insurance company will cover the remainder of the losses. It is best to choose the deductible amount that you are most comfortable with.

Comprehensive is part of any vehicle insurance policy that is optional so there are some that are meeting the legal limits of insurance but would still be at a loss if a freak hail storm visited their neighborhood. According to the Insurance Information Institute (III), close to 75 percent of those that are insured seek to buy comprehensive coverage. This is a large percentile by any variation but once a storm hits, the remaining 25 percent will wish they had comprehensive coverage.

How to Prepare for Unexpected Weather

The number one way to prepare for unexpected weather is to make sure all household vehicles are covered with comprehensive insurance. While some accidents are completely unavoidable, it never hurts to ramp up defensive driving skills if a storm happens while you are on the road. For example, if one is in Texas with a hailstorm, it is best to seek coverage that can cover the entire vehicle and stay put until it has passed. During heavy rain and high floods, avoid areas that flood easily. There are numerous tips on how to best handle unexpected weather.

I Need to File a Weather Related Claim

If weather has struck close to home and a claim needs to be filed, the first step should have happened before the weather even occurred. Consumers must know what policies they carry on their vehicles and understand what means for their coverage and their pockets. High deductibles can come as an unexpected surprise just like hail when serious damage is done.

If a consumer has educated him or herself on the nuances of their vehicle policy, it is best to report the damage as soon as possible. If the car is not in a drivable state, the insurance company may be able to arrange a tow truck as well as set up the insured with a rental car so as not to interrupt daily schedules. Both of these options are available from insurance company. Check your policy to see if it includes towing and rental cars.

Be sure to ask whether an insurance company can refer a damaged car to a repair garage that offers warranties on their vehicle repairs. This can prevent multiple trips to a garage years after a storm has passed.

Know Your Insurance Policies

By preparing in advance for unexpected weather situations, consumers set themselves up for a less traumatic incident if/when a loss occurs. It is important to note that losses caused by natural disasters have only increased in the past years. According the ISO’s Property Claim Services (PCS), the leading authority on insured property loss in the U.S., vehicle losses because of natural disasters such as hurricanes, floods, tornadoes and hailstorms has doubled between 2001 and 2005. Ron Berry, Senior Vice President of the Council of Better Business Bureaus cautions, “Drivers spend a lot of money on auto insurance and it is important for them to be as familiar as possible with what their coverage includes when they ‘re making their purchase decision. But too often, people shopping only for the lowest rates don’t notice their lack of certain types of coverage until they try to make a claim.” Heed Ron Berry’s words and examine the type of insurance coverage that currently exists on a personal vehicle and think ahead. If that coverage isn’t sufficient, consider adding options. Paying just few dollars more now might save thousands in an unexpected event.

Image: Flickr.

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