Hail is an unpredictable peril that catches many London Market insurers off guard each year. Even in years when catastrophe loss activity is lower than expected, it is often the higher attritional weather-related claims that end up putting a sizeable dent in many insurance and reinsurance firms’ earnings.
It may take months or even years for many homeowners to detect hail damage to their roofs.
In some instances, hail can be devastating. Severe hailstorms in Texas and Oklahoma in 2021 pummelled homes, cars, and businesses and estimated to have caused around $3.5 billion in damages.
The full extent of damage caused by hail can also emerge over time, leading to loss creep, where claims are filed long after a storm event has occurred. For example, it may take months or even years for many homeowners to detect hail damage to their roofs. However, the hidden damage caused by these events can be one of a roof’s more critical underwriting risks and increase its vulnerability to damage from future events.
For London Market underwriters to get a better understanding of their true hail loss exposure, it is critical they know which regions are prone to hailstorms or are areas of emerging hail risk, along with being able to assess pre-existing hail damage and gauge the roof condition of the properties in their portfolios.
Where are the hotspots?
More than 6.2 million U.S. properties were affected by one or more damaging hail events with more than $14 billion in claims in 2020, according to Verisk’s report, ‘The Hail Hazard and Its Impact on Property Insurance’.
While hail is not restricted to one designated region of the United States., some states experience more severe storms than others. The number of properties damaged by hail were predictably high in 2020 in a vulnerable region known as “hail alley”, which runs through the central United States to Texas.
Approximately 1.5 million properties in Texas were affected by damaging hail events in 2020, accounting for almost a quarter of properties affected nationwide. It was followed by 509,100 in Illinois and 371,800 in Indiana.
On average, it took 6.85 months and 7.62 months, respectively, to repair roofs on residential and commercial properties following 2020 hail events, based on a Verisk analysis of the top five counties in each of the top 10 states affected by damaging hail events.
To access a more detailed breakdown of the states with the highest hail activity and numbers of properties affected in 2020, you can access this information and further analysis in our report.
How to evaluate your true hail exposure
Whether or not a roof has previously been damaged by hail shouldn’t be a discovery made only in the event of a claim. With the right tools and analytics, London Market insurers can be proactive in assessing this damage and make sensible underwriting decisions. For residential and commercial properties across the United States, Verisk provides robust hail risk assessment information for evaluating your hail exposure such as:
- Hail risk score
- Hail damage score
- Roof condition, age, and type
- Coverage and advisory loss costs
- Replacement cost estimates
Being able to verify previous hail exposure or property details early in the quote process or have a prefill process running in the background when developing quote can help give property insurers a competitive edge in this space.
For more information, please contact Chris Kent, director of business development, at Verisk.