Near-record losses posted by Ohio insurers from May storms

UPDATED LOSS INFO (7/15) 
Property Claim Services (PCS) conducted four resurveys on this storm event and issued a final loss estimate report in March 2015. Due to the perils associated with the damage (wind, hail, flooding, tornadoes), multiple surveys are often necessary to capture more complete claims data. Final loss estimates for Ohio from the May 20-27, 2011 storms now stand at $1.05 billion with 100,000 claims.

This disaster comes in just behind the Xenia tornado outbreak of 1974 in insured losses, making it Ohio’s third costliest catastrophe (in 2014 dollars) in recent years. See OII’s July 2015 OII Ohio auto and homeowners insurance trend report for details.
Revised total loss estimates for the 20 states affected by the May 2011 storms stand at $6.9 billion. Ohio insured losses from this storm event ranked second behind Missouri, which are now estimated at $2.16B.

ORIGINAL RELEASE: June 20, 2011

After a storm-ridden first quarter, Ohioans and their insurers braced for yet another round of storms in May that caused even more extensive losses. Statewide preliminary estimates find that insurance companies racked up losses totaling $322-400 million from the May 20-27 storms. According to the Ohio Insurance Institute (OII) this is the third costliest natural disaster to hit the Buckeye state in recent times, behind the April 3-4, 1974 Xenia tornado super-outbreak and the September 14, 2008 Hurricane Ike windstorm. The number of Ohio claims filed to-date from last month’s storms is estimated at 68,000-77,000.

The same system responsible for the intense May 22 EF-5 tornado in Joplin, Mo., caused extensive damage as it moved through Ohio. Hard-hit areas included southwestern and northern parts of the state. At least nine tornadoes were confirmed in Ohio from May 23-26, including five EF-1 tornadoes with maximum winds between 90-105 mph. Widespread rain, hail and damaging winds were reported throughout the state.

According to Property Claim Services the May 20-27 storm event affected 19 states: AR, GA, IA, IL, IN, KS, KY, MI, MN, MO, NC, NE, NY, OH, OK, PA, TN, VA and WI. PCS preliminary Ohio insured loss estimates for this six-day period are 77,000 claims totaling $400 million. Nationally, severe weather for this period will likely result in insured losses of $4-7 billion, according to risk modeling agency AIR Worldwide. AIR expects April and May’s tornado outbreaks to be the costliest in US history.

According to OII President , this is the fifth major storm outbreak to hit Ohio in less than six months. Ohio was part of four major catastrophes during the first quarter, two in February and the two in April. Click here for Ohio’s “Groundhog’s Day” winter storm summary. Late February storms caused nearly $69 million in insured losses storms. Dual Ohio storm events in April caused over $123 million in insured losses.

May 23-26 Ohio storm recap
May 23
: A line of strong-to-severe thunderstorms moved quickly through the southwest portion of Ohio during the evening hours of May 23, bringing widespread reports of wind damage. Three Ohio tornadoes were confirmed, including two EF-1 tornadoes near Fairborn and Springfield, according to National Weather Service (NWS) Wilmington. High winds were also reported in both Cuyahoga and Lorain counties uprooting trees and damaging property.

May 25-26: Some intense thunderstorms developed over the Ohio region during the afternoon hours of May 25. Three-inch hail was reported in the south Dayton area. In the late evening and early overnight hours (into May 26), a strong line of thunderstorms moved eastward through the state. The line produced winds in the 40-60 MPH range, according to the NWS Wilmington. Four tornadoes were reported in southern portions of the state including an early morning EF-1 in Liberty Township, Butler County on May 26. Numerous reports of thunderstorms and tornado damage were reported in northern portions of the state. EF-1 tornadoes touched down in Huron County on May 25 and in Ashtabula County on May 26 according to the NWS Cleveland.

OII preliminary May storm loss estimates
25 property/casualty insurance companies participated in the OII May 20-26 storm survey. They represent about 82 percent of Ohio’s personal auto market, 79 percent of the homeowners’ insurance market and nearly 31 percent of Ohio’s commercial lines market based on 2009 Ohio premium volume. Initial insurance company claims estimates ranged from three to 17,000. Losses reported by companies varied from $15,000 to $101.5 million.

“Not all insurance companies are represented by OII’s survey so final losses will likely be higher than these preliminary estimates,” said Kelso. “Both OII and PCS expect to conduct resurveys toward the end of the year to firm up insured loss information from these storms.”

• Claim estimates: 67,955
• Homeowners: 38,597               • Auto: 27,387                • Business: 1,971
• Loss estimates: $322.1 million
• Homeowners: $214.9 million     • Auto: $80.4 million       • Business: $26.9 million

Based on OII findings, 57 percent of claims reported to-date pertain to homeowners or renters insurance. The storms caused wind and hail damage to roofs, gutters, siding, windows and outdoor property. The high number of auto claims (40 percent of preliminary figures) was primarily due to extensive hail and wind damage from fallen limbs and flying debris.

PCS preliminary May storm loss estimates for Ohio
PCS estimates show Ohio losses at 77,000 claims totaling $400 million.

Common losses and coverage
Most property damage related to high winds and hail are covered by insurance. 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.

Deductibles apply to auto, homeowners and commercial claims. OII recommends obtaining repair estimates prior to filing a claim if you suspect the damage is close to your deductible.

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. NFIP’s agent referral program is available at www.floodsmart.gov or call 888-CALL-FLOOD for coverage assistance.

Insured storm-covered perils include:
• Property damage from hail, high winds and flying debris: Damage caused by high winds, tornadoes and hail is covered by homeowners, renters and commercial insurance policies. Homes or belongings damaged as a result of a fallen tree – whether it is your tree or a neighbor’s tree – are covered under your homeowners insurance policy.
• Vehicle coverage: Vehicles damaged by hail, flooding or high winds 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.
• Power failure: 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).
• 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.

Ohio storm histories
Click here for a history of Ohio wind and hailstorms. Click here for a history of Ohio winter storms.

Repair tips
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,” said Kelso.

To protect against the possibility of contractor fraud, see OII’s home repair tip sheet.

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.

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Online resources
• OII winter storm history
• OII wind and hail storm history
• OII’s home repair tips
• Insurance Information Institute “If a Tree Falls on Your House, Are You Covered?”
• Property Claim Services
• AIR Worldwide