AUSTIN – Devastating softball-sized hailstorms and widespread flooding have many insurance firms hoping the weather calms down, at least for the rest of the year.
Damages resulting from hailstorms and flooding have created record-setting losses for both homes and automobiles in 2016. With insurance losses totaling $4 billion in the first two quarters alone, 2008’s Hurricane Ike is the only year in the last decade that can compete with 2016’s losses. Hurricane Ike brought with it a whopping $5 billion in damages caused by the storm.
Multi-million-dollar hailstorms pounded Fort Worth, Arlington and Plano in March. Softball-sized hail knocked holes through roofs in the city of Wylie on April 11.
“Texas has seen softball-sized hail, but it usually doesn’t happen in populated areas," Mark Hanna, a representative for the Insurance Council of Texas (ICT), told the Southeast Texas Record.
Hanna spoke with Wylie Insurance Agency after the storms and learned about damage to one employee's home.
“She said one of the hail stones came through her roof, went through the shingles, wood and ceiling and landed on the living room floor. It was not only large hail but also very hard hail. That does a lot of damage,” he said.
ICT reported the state’s costliest hailstorm on record struck San Antonio on April 12. Two more hailstorms pounded the city later in the month, raising the city’s total losses to over $2 billion.
Hanna said he didn’t hear about anyone being physically injured by the hail, but the fact that the storms came during the middle of the night may have been a reason why no one was hurt. He said the insurance industry has been working overtime due to the damage caused by the storms.
“You’ve got the catastrophe teams all throughout the state dealing with the claims, the roofing industry on overtime and auto-repair shops in major cities doing double-time," he said. "It was so bad in San Antonio, the insurance industry was taking damaged cars to Austin and Houston to get repaired."
Hanna said the insurance industry doesn’t receive state financial assistance during statewide weather events causing extreme loss, but the insurance companies can consider weather events a catastrophe after receiving a certain number of claims.
“They send additional adjusters out to help other adjusters and if it’s bad enough, the state regulator, like I believe he did [for these losses], will give the insurance companies a little more time to settle all the claims,” Hanna said. “They plan for things like this. This is Texas and we have more than our share of catastrophes. It’s the nature of doing business in Texas. Some years we go without so many hail storms, tornadoes and hurricanes and wildfires, and other years it’s financially pretty rough.”
The pressure will fall on insurance rates, Hanna said, but the insurance companies don’t look at one catastrophic event and raise rates.
“Some companies may raise rates, some may lower their rates, it depends on the concentration of their policies and individual decisions,” Hanna said.