Nobody Seems to Know Why Hail Storm Losses Suddenly Began Rising in 2008

By | June 17, 2019

  • June 17, 2019 at 7:04 am
    OpPolaResearch Bear says:
    Hot debate. What do you think?
    Thumb up 9
    Thumb down 11

    The abberation of $19B seems to be the new norm, implying the immediate prior years may have been artificially low relative to the underlying average. In other words, the author may be looking at the phenomena with the improper perspective. The norm at the time of the swift increase to a new plateau may have been $16B, with $12B being below that average and $19B being above the average. The wide variance may be due to random chance of where hail hit; i.e. largely in unpopulated areas vs. largely in densely populated areas.

    With the above said, the increase to a new level, which shouldn’t be considered a stable level (average) due to inflation, could be due to increased costs of building supplies needed for repairs and construction of dwellings in new areas more subject / exposed to hail conditions. I should add that hail deductibles may have remained fairly constant over the subject time period, leading to a leveraged increase in excess (i.e. net of deductibles) claims. An analysis of gross-of-deductible claims would be informative.

    Finally, I’m waiting for Global Warming Hoaxers to tell me I’m wrong through a rapid-fire submission of down-votes, perhaps followed by a lame explanation that the increased hail losses are due to carbon emissions and cow & bear farts. It’s only a matter of minutes away…

    • June 17, 2019 at 8:31 am
      CL PM says:
      Well-loved. Like or Dislike:
      Thumb up 10
      Thumb down 0

      Another correlation to investigate is the number of roofing firms pre and post 2008. Are more people in this business and seeking more opportunities to replace roofs? Or, did a real increase in hail create more opportunity for roofers? Chicken or egg?

  • June 17, 2019 at 9:48 am
    jim says:
    Like or Dislike:
    Thumb up 5
    Thumb down 1

    What get’s hit is the primary factor and nothing more. It has been hailing since the beginning of time, so I that sense we have built larger targets as metro areas grow. The random nature of a hail producing storms have no specific boundaries other than areas of the country that are more likely to be in the way due to geographic location, like Denver where the mountains provide mechanical uplift for more frequent supercell development. Hail can fall anywhere with a high degree of entropy. When it hits a forest or pastureland, which is very often nobody cares.

    • June 17, 2019 at 6:13 pm
      An Actuary says:
      Like or Dislike:
      Thumb up 3
      Thumb down 0

      So you’re suggesting that there was a giant, one-time increase in either the number or cost of hail targets in 2008? I think you’re wrong. Other posters have provided a much more plausible explanation.

  • June 17, 2019 at 11:59 am
    Sammy says:
    Well-loved. Like or Dislike:
    Thumb up 14
    Thumb down 1

    Look no further than the roofing industry, look up “Win the Storm” convention in Vegas where they teach and preach the art of prospecting neighborhoods for roof replacement regardless of the presence of damaging hail. They prey on areas where roofs are 20 plus years old and work to convince uneducated claims staff that a roof has sustained hail. More so there are too many insurance carriers that no longer use trained field adjusters but rely on contractors to inspect homes, the fox in charge of the hen house type deal! 10 years ago you never found roofs being replaced in areas where auto sustained “0” damage. If a damaging storm hits, auto claims should be 2 – 1 in comparison to roof claims. Until common sense and effort of carriers return this shady practice of the roofing industry will only get worse. Why anyone would trust a door knocking contractor is beyond me. Any decent roofing contractor gets all the business they can handle based on reputation.

  • June 17, 2019 at 1:43 pm
    mikey says:
    Like or Dislike:
    Thumb up 7
    Thumb down 3

    Thanks Obama! ;)

    • June 17, 2019 at 3:48 pm
      RMCN says:
      Like or Dislike:
      Thumb up 1
      Thumb down 8

      Really?? Oh how childish. I can see you are a tRUMPER.

      • June 17, 2019 at 6:29 pm
        Craig Cornell says:
        Like or Dislike:
        Thumb up 8
        Thumb down 2

        It’s a joke! 2008. Get it? (You are confirming the stereotype that liberals have no sense of humor.)

  • June 17, 2019 at 2:15 pm
    Henry Vogel says:
    Like or Dislike:
    Thumb up 2
    Thumb down 0

    I would bet the increased cost come with another class held for attorney. Called assignment of benefits by the homeowner. Once this problem is cured, losses drop as evidence in Texas and now Florida. As more states adopt the statues that stop assignment of benefits, the cost will decrease. for more information check with Steve Badger of Zelle Law Firm in Dallas TX

  • June 17, 2019 at 2:28 pm
    Bob S says:
    Well-loved. Like or Dislike:
    Thumb up 10
    Thumb down 0

    I’m guessing 2008 is when roofing companies started going door to door after hail storms. I was in a hail storm in Tampa. My brand new car was parked outside for the entire storm. No damage. The following Monday I got two roof claims from that neighborhood.

  • June 17, 2019 at 3:05 pm
    Adam says:
    Like or Dislike:
    Thumb up 5
    Thumb down 0

    I think the two comments about storm chasing contractors and attorneys could have some merit…

    Wonder if it might help to look back to see how technology advancements back then (i.e. hailswaths and mapping) may have made it easier for these third-parties to target areas impacted by hail?

    • June 17, 2019 at 7:34 pm
      OpPolaResearch Bear says:
      Like or Dislike:
      Thumb up 3
      Thumb down 0

      I believe ‘hail-chasing contractors’ and some such specialist lawyers, is a significant factor in the uptick. I attended a continuing ed presentation a few years ago by a fellow who detailed those two groups aggressive approach to profiting from hail damage, including some incidents of fraudulent claim padding. My OP above failed to mention it. Bear culpa.

      • June 18, 2019 at 12:06 pm
        Agent says:
        Like or Dislike:
        Thumb up 3
        Thumb down 0

        I have seen a lot of fraud in the roofing business. They will pray on senior citizens, ask for a substantial sum to get started and then disappear.

  • June 18, 2019 at 1:34 pm
    retired risk manager says:
    Like or Dislike:
    Thumb up 2
    Thumb down 0

    Another party to blame are the builders. OSB instead of plywood for decking, cheap felt and cheap shingles. But the insane design of the roofs really drives up the cost of repair. There is no need, in Texas, for the pitch and weird designs. Crawl up in some of those attics and you will find very little storage space. The buyers think they look cool, but when the roofers have to wear a safety harness and be tied off by way of a counter cable, the costs really go up. A simple hip roof is all that a house needs.

    • June 20, 2019 at 12:18 pm
      Agent says:
      Like or Dislike:
      Thumb up 2
      Thumb down 0

      The roofing manufacturers do make heavy 30 year roofs that withstand almost anything mother nature throws at it, but they are not used as much because they cost a lot.



Add a Comment

Your email address will not be published. Required fields are marked *

*