June ’07 hailstorm now a record-breaker

FOR RELEASE: June 19, 2008

June 2007 Akron-Canton area hailstorm losses now at record high

COLUMBUS – The June 8, 2007 hailstorm that pummeled Summit County including the greater Akron/Canton area is one for Ohio’s record books, according to a resurvey of insurance claims by the Ohio Insurance Institute (OII).

Original loss estimates released in July 2007 put hailstorm losses at about $105 million from 29,219 claims. The May 2008 resurvey estimates found that insured losses skyrocketed to at least $288 million – increasing nearly 175% – and setting a record for Ohio hailstorm-related losses based on previous OII surveys.

Expected claims from the northeast Ohio hailstorm increased 74% – from 29,219 to at least 50,840 according to the resurvey.

“Contractors and roofers, particularly those without local ties, have been known to seek out and canvass hail-damaged neighborhoods distributing fliers, conducting door-to-door solicitations, advertising and even telemarketing,” said Daniel J. Kelso, OII president. “We expected to see an increase in claims, but not to this extent.”

“One of the unfortunate consequences that we’ve seen is that some area residents were talked into submitting claims by unscrupulous roofers and contractors, even though their homes were not damaged from this storm but through normal wear and tear,” said Mike Paris, President of the Canton Better Business Bureau. “What homeowners may not realize is that this is a form of fraud.”

The Ohio Department of Insurance recently announced stepped-up efforts by investigating home repair contractors suspected of fraudulent or high-pressure sales activities, including those who are either inflating consumer claims or invoices to cover deductibles or acting as a public adjuster without proper state licensing (click here for the ODI news release).

Akron Better Business Bureau President Vic Wlaszyn warns consumers that some out-of-state contractors affiliate themselves with local businesses; misleading homeowners into thinking they’re using a local firm when they’re not. This can prove damaging to a local business engaging in the practice of selling its name.

“Any future claims stemming from incomplete repairs or poor workmanship ultimately become the responsibility of the local firm,” said Wlaszyn. “It can affect the company’s reputation and bottom line long after the departure of the out-of-state roofer or contractor.”

Homeowners insurance resurvey findings
Homeowners insurance claims experienced the biggest jump in both numbers and dollars. Original hailstorm estimates showed 13,694 homeowners claims totaling $70.4 million. Current homeowners claims climbed to 34,175, nearly 2½ times the original estimate. The revised $235.5 million price tag associated with homeowners claims increased more than threefold from the original loss estimate. Damage to roofs and siding were the most commonly reported homeowners losses.

Other resurvey findings
Auto-related hail claims also increased from last year’s hailstorm loss survey–from 14,704 claims to 15,528. Original insured losses due to hail-damaged vehicles rose from $30.8 million to about $37.8 million.

Property/casualty insurance companies participating in the OII claims loss resurvey represent about 84% of Ohio’s personal auto insurance market and 82% of the homeowners market based on 2006 premium volume. About 58% of Ohio’s commercial lines market was represented. Revised insurance company estimates ranged from 29 to over 14,200 claims. Losses reported by companies varied from a low of $144,400 to over $86 million. Ohio’s top 10 writers of auto and homeowners insurance participated in both surveys.

“It’s important to note that not all insurance company claims are represented in our surveys. We anticipate actual losses to be even higher than what we’re reporting,” noted Kelso.

Property damage caused by hail, high winds and tornadoes is typically covered by insurance. Hail coverage specifics vary by insurer, with some offering additional coverage through endorsements. Vehicles pot-marked by hail are covered under the “other-than-collision” (also known as “comprehensive”) portion of an auto insurance policy. This is optional coverage that protects insured vehicles in situations other than a collision or overturn.

Other Ohio hailstorms
A Central Ohio hailstorm on October 4, 2006 generated at least $239 million in insured losses, which up to now was Ohio’s costliest hailstorm in recent times. Not far behind was the 2003 Easter Sunday hailstorm (April 20, 2003) producing $230 million in insured losses, based on a resurvey a year after the storm. (NOTE: These figures are not adjusted to 2008-dollar amounts.)

According to preliminary OII findings, recent Ohio hailstorms that produced significant insured losses include:

  • June 8, 2007: Original OII survey estimated losses at 29,219 claims totaling over $105 million.
  • October 4, 2006: The most prominent storms produced hail and damaging winds across most of central Ohio. OII’s preliminary estimates show that at least 45,444 claims for $239.6 million in insured losses were filed.
  • May 17, 21, 26 & 27, 2004: This series of May storms affected Canton, Northeast Ohio, Newark and the greater-Dayton area. Over 44,000 claims totaled nearly $167 million in estimated insured losses.
  • April 20, 2003: This Easter Sunday hailstorm caused pockets of major damage over the central Ohio area. OII’s original survey estimated insured losses at $51.7 million. A follow-up survey in April 2004 found that insured losses had skyrocketed more than four-fold to $230.5 million and that reported claims more than tripled to 36,891.
  • November 10, 2002: The series of severe storms caused at least $91 million in insured losses from nearly 15,000 claims. Most losses resulted from tornadoes and high winds, but hail was also a factor.
  • April 9, 2001: A hailstorm in the Dayton-Kettering area caused at least $70 million in insured losses from about 27,575 claims.
  • April 9, 1999: An early morning F4 tornado that ripped through the Cincinnati area caused at least $66 million in insured losses from about 4,815 claims. Hail was cited in a number of claims.

The OII is a trade association representing insurance companies and agent groups for the property/casualty insurance industry. Its primary objective is to help Ohioans achieve a better understanding of insurance and safety issues.

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ADDITIONAL  RESOURCES:
OII contractor/repair tips
• Ohio Wind/Hailstorm History Through August 2016