February winter storms

FOR RELEASE: April 8, 2010

FOR INFORMATION: Dean Fadel/ – 614.228.1593

February winter storms cause substantial damage to Ohio property
Consumers encouraged to choose licensed contractors for repairs

Although Ohio’s ice and snow are things of the past, thousands of winter storm-related claims have been reported and, in most cases, closed by insurers.

According to the Ohio Insurance Institute (OII), insured losses from the series of February winter storms caused at least $28.2 million in losses, with 12,173 claims filed to-date across the state. Because some property damage has yet to be detected or reported, OII reports that losses will rise over the next few months.

February was unusually harsh for Ohio, bringing record snowfalls to many parts of the state (see NOAA’s National Climatic Data Center Feb. record snowfalls in Ohio). Three major winter outbreaks affected states throughout the Midwest and Atlantic Coast on Feb. 4-6, Feb. 9-11 and Feb. 23-28. On February 13th, the National Weather Service reported that every state had snow on the ground, with the exception of Hawaii.

“When storms follow each other in quick succession as they did in February, there’s little opportunity for accumulated snow to melt,” said OII President . “As a result, properties are more susceptible to ice dams forming in gutters and other types of roof-related damages.”

According to Property Claim Services (PCS), the early Feb. storm primarily affected Washington DC, DE, MD, NJ, PA, VA and WV with preliminary insured loss estimates of $135 million. The second storm impacted Washington DC, DE, MD, NC, NJ, PA, VA and WV with initial losses of $560 million. Preliminary insured loss estimates from the late Feb. storm affecting CT, MA, ME, NH, NJ, NY, PA, RI and VT, stand at $325 million. Ohio was not included in the PCS storm loss reports.

Survey results
25 property/casualty insurance companies participated in the OII February winter storms loss survey. They represent 67 percent of Ohio’s personal auto market, about 78 percent of the homeowners’ insurance market and almost 28 percent of Ohio’s commercial lines market based on 2008 Ohio premium volume. Insurance company estimates ranged from no losses to 3,250 claims. Losses reported by companies varied from none to over $8 million.

“It’s important to note that not all insurance companies are represented by this survey. Also, some insurers weren’t able to provide Ohio-specific data or didn’t experience a major uptick in claims to track losses specific to these particular storms. Actual losses will be higher than our initial findings,” said Kelso.

OII preliminary February winter storm loss estimates (based on information from 25 P/C insurers):
• Claim estimates: 12,173
• Homeowners: 11,173   • Auto: 384   • Business: 616
• Loss estimates: $28.2 million
• Homeowners: $25 million   • Auto: $255,940   • Business: $2.9 million

About 92 percent of the claims filed to-date pertain to homeowners or renters insurance. The storms caused power outages, frozen pipes, back-up of sewers and drains, fallen trees/limbs, and roof, gutter and interior water damage from ice, ice dams, wind, water and heavy snow accumulation.

About 3 percent of the claims pertain to auto insurance, some due to damage caused by fallen branches and debris from ice and snow accumulation. The increase in auto claims frequency may not have reached catastrophic levels for all insurers, therefore some were unable to pinpoint Ohio claims related to auto caused by Ohio February storms. Commercial losses, based on 616 claims, currently stand at about $2.9 million.

Common winter weather losses and coverage
Most property damage related to winter storms is covered by insurance, with the exception of flooding. Deductibles apply to auto, homeowners and commercial claims. OII recommends obtaining repair estimates prior to filing a claim if losses are close to your deductible.

Common covered perils include:
• Fallen trees and limbs: Typically, costs associated with removal of a fallen tree (or trees) is covered up to $1,000 ($500/tree) under the following circumstances:
– The tree was uprooted due to windstorm, hail, or the peril of weight of ice, snow or sleet or a neighbor’s tree was downed under the same circumstances and
– The tree damaged a covered structure such as your roof, garage or shed. Coverage would also apply if a fallen tree blocks the insured’s driveway or handicap access entrance.
• Power failure: Damage from burst pipes from a power failure is covered by most homeowners insurance policies. While homeowners policies differ, food spoilage is normally excluded if the cause of loss is an off-premises power outage. Limited coverage may be added by endorsement (coverage usually up to $500).
• Vehicle coverage: Vehicles damaged by fallen ice, tree limbs or flooding are normally 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.
• Basement water backup: Coverage for water backup in basements (drains/sewers) is excluded from flood insurance and most homeowners insurance policies. However, this coverage is available by endorsement on many homeowners insurance policies. Check with your insurance provider as details and coverage varies by company. Cost averages about $50/year.
• Damage from ice dams and/or frozen pipes: Roof and gutters are typically affected by ice and snow accumulations. Damage to interior walls and floors are also covered by either peril.

Damage from flooding is excluded from every homeowners/renters and business insurance policy. Flood insurance coverage normally can be purchased through a separate policy for homes and businesses. Coverage is separate for the building (structure) and its contents. Licensed property/casualty insurance agents can sell flood insurance. Email NFIP’s agent referral program at www.floodsmart.gov or call 888-CALL-FLOOD for coverage assistance.
NOTE: The flood insurance program is currently on hold until Congress reconvenes and takes renewal action on or after April 12. Although this doesn’t affect current flood insurance policies, it prevents the issue of new flood policies. Current policyholders are unable to increase coverage on existing policies and policy renewal are on hold until Congressional reauthorization occurs.

Ohio winter storm history
Click here for Ohio winter storm information.

Repair tips and adjuster info (download a tip sheet)
OII urges Ohioans to consider hiring licensed Ohio contractors to repair damages.

“Ultimately, homeowners are responsible for the roofer or home contractor of their choice. We caution them to check for proper licensing, references and referrals to help prevent problems down the road,” added Kelso.

Expenses incurred when taking measures to protect against further damage (such as placing plastic over a damaged roof, covering windows to prevent further water damage, etc.) are usually reimbursable under homeowners insurance. OII advises saving these receipts for claims filing.

To protect against the possibility of contractor fraud, OII offers the following tips:
• Obtain more than one estimate. Don’t be bullied into signing a contract, especially one that eliminates your ability to represent your claim.
• Obtain all information in writing, including cost, work to be completed, repair time and payment schedules, and contractor guarantees—and make sure all details are provided.
• Ask for references and check them. OII suggests checking with family and friends for referrals, or contacting your local homebuilders association or area Better Business Bureau for assistance.
• Ask for the contractor’s drivers license and write the number down along with a description of the vehicle and license plate number. Some contractors come into disaster areas from out of state when damage is widespread and may not meet state and local licensing or bonding requirements. Proper licensing normally releases you from liability if workers are injured on your premises.
• Never sign an incomplete or blank contract or provide personal information such as your Social Security or credit card information.
• Never allow a contractor to serve as your negotiator with your insurance company. Should a consumer allow the roofer or contractor to negotiate on their behalf and damages are either over-inflated or nonexistent, your insurer is not obligated to cover them.
• Other than your insurer or attorney, a public adjuster is the only claims professional that can legally represent your rights as an insured during the claims process. Public adjusters are licensed by the Ohio Department of Insurance, so ask for credentials if you suspect adjuster misrepresentation. View tips on hiring a public adjuster from the Ohio Department of Insurance.
• Be present for all home inspections conducted by repair estimators. Although most estimators conduct legitimate reviews, there have been documented cases where damage was inflicted during repair estimates to either inflate or create property damage.
• Be wary of door-to-door contacts, fliers, advertising blitzes or phone solicitations for repairs. The homeowner should take the lead role in contacting companies to handle repairs and not be guided by potentially false or fraudulent marketing materials or repair claims.
• Watch for padded repair estimates. There is no such thing as a “free insurance deductible.” If a repair estimator asks ahead of time for the amount of your insurance deductible or for a copy of your insurance company loss estimate, this should serve as a “red flag.”
• Check and double-check the quality of the roofing shingles used as a replacement. There are many grades and quality.
• Don’t be tempted to conspire in a fraudulent insurance claim. Insurance fraud is a felony. Disaster repairs often heighten the opportunity for insurance fraud and abuse. Also, be aware that insurance coverage may be void if a policyholder’s intentional misrepresentation is discovered.
• Report potential fraudulent claim activity to the Ohio Department of Insurance Fraud and Enforcement division by calling 800.686.1527 or online.

OII is a trade association representing insurance companies and agent groups for Ohio’s property/casualty industry. Its main objective is to increase understanding of insurance and related safety issues.