May 7-8 2010 Northern Ohio storms losses top $31 million

FOR RELEASE: June 9, 2010

COLUMBUS— A series of May 7-8 storms centered across the top half of the state caused at least $31.4 million in damages, based on preliminary insured loss estimates from the Ohio Insurance Institute (OII).

Thunderstorms produced hail, wind and a May 7 tornado that touched down in Wood County. The National Weather Service reported hail measuring between 1¼ – 1½ inches (half dollar to ping-pong ball size) in Sandusky.

According to Property Claim Services (PCS), Ohio is one of four states affected by this weather pattern along with New Jersey, New York and Pennsylvania. PCS estimates overall losses at $85 million with $32 million in Ohio.

May storm – Preliminary Ohio loss estimates
27 property/casualty insurance companies participated in the OII May storm loss survey. They represent approximately 80 percent of Ohio’s personal auto and homeowners insurance markets and about 30 percent of Ohio’s commercial lines market based on 2008 Ohio premium volume.

Insurance company estimates ranged from 2 to over 1,630 claims. Losses reported by companies varied from a low of $2,500 to over $7.1 million. Most of Ohio’s top 10 writers of auto and homeowners insurance participated in the survey.

Damage to roofs, gutters, siding, windows and walls from fallen trees and limbs were the most commonly reported homeowners insurance losses. Auto damage was mostly caused by hail and included vehicles at several car dealerships.

“Since these are preliminary loss estimates and don’t represent all insurance companies, we expect damage figures to rise,” said OII President Daniel J. Kelso. OII plans a follow-up on this storm next spring to track any significant changes in losses. Previous hail/wind resurveys have shown significant disparities in both losses and numbers of claims, some of which are due to an increase in storm chaser and potential fraudulent claims activities.

OII preliminary estimates (based on information from 27 P/C insurers)
• Estimated number of claims: 8,161
• Homeowners: 5,792             • Auto: 1,934           • Business: 435
• Loss estimates: $31.4 million
• Homeowners: $24.8 million   • Auto: $3.6 million   • Business: $3 million

Although storm losses were substantial, this is not one of the costliest. For a list of Ohio hail/wind storms by year and loss estimates, click here.

Hail claims study and Ohio trends
The National Insurance Crime Bureau (NICB) reports an increase in US hail claims along with questionable hail claims (QC) between 2006 and 1st quarter 2010. In its May 2010 Hail Claims Loss Report, the NICB study shows that the number of claims rose from 256,000 claims in 2006 to 413,178 claims in 2009, a 61% increase. QCs increased from 301 in 2006 to 711 in 2009, a 136% increase.

Ohio ranks seventh in the US in both overall hail claims and QCs during the same time periods of the report (see tables below).

According to OII, there was at least one substantial hail/wind storm in each of these years. Click here for a list of Ohio hail/wind storms by year. The NICB study finds that Central US states tend to have the most hail loss claims and QCs.

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Click Image to Enlarge

Source for both tables: National Insurance Crime Bureau

 

Tips on hiring a contractor/avoiding home repair scams
With questionable claims practices on the rise, consumers should be wary of fly-by-night repair businesses and roofers who may not be fully licensed and bonded in the state of Ohio.

“Following a disaster, contractors and roofing companies focus their marketing efforts and advertising campaigns in affected areas,” said OII President Daniel J. Kelso. “Most of these efforts are by local, reputable businesses. However, there will be those who canvass neighborhoods, misrepresenting their services or misleading consumers into believing they’re eligible for ‘free roofs’ or ‘free repairs’ through their insurer when their roof is in disrepair due to neglect or age.”

OII further advises against signing a contract that allows a company to represent a homeowner in negotiating with their insurance company. In many cases, a contractor is not properly licensed to handle the claims process.

Carefully check the background of contractors and others who promise “cheap” repairs. OII suggests checking with family and friends for referrals, or contacting your local Ohio Better Business Bureau. View a complete list of home repair tips.

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 release: May 7-8 Northern Ohio storms raise insurance coverage & home repair questions
•  OII Ohio wind/hail storm surveys by year
•  NICB release: Suspicious Hail Damage Claims
•  NICB Suspicious Hail Damage Claims Report
•  OII’s Home repair tip sheet