According to Property Claim Services (PCS), which provides property loss and catastrophe information for the property/casualty insurance industry, Ohio’s insured losses from Hurricane Ike are now estimated at $1.255 billion. The Ohio and Federal Emergency Management Agencies project local government costs for protection and clean up at an additional $38.6 million.
According to the Insurance Information Institute, total damages from the Xenia Super-outbreak are about $1 billion in 2008 dollars.
“The message for Ohioans at this one-year anniversary mark is not just its record losses, but to serve as a reminder that we are not immune to natural disasters,” said OII President Daniel J. Kelso.
Insurance companies reported a record-high number of Ike-related claims were filed across the state. PCS estimates that at least 270,000 claims have been filed in Ohio including 220,000 homeowners, 30,000 commercial and 20,000 auto insurance claims.
“From a claims-handling standpoint insurers were truly tested,” said Kelso. “Many of our companies were servicing claims in multiple Ike-damaged states simultaneously.”
Even with a record number of claims, OII reported that insurers had closed an average of 95% of their Ike windstorm claims by March, most within 10-90 days and well within the six-month period following the storm.
The Institute joins the Ohio Department of Insurance in reminding those who think they may have sustained damage due last September’s windstorm to review their policy language as it pertains the time frame in which a storm-related claim must be filed. Some companies require their policyholders to file a claim within a year of the loss. Others do not state a specified time frame, but contractually indicate that a claim should be filed “within a reasonable time from when the damage is first noted”, “promptly,” or wording similar to “immediately notify your company of a loss.” Claims filing conditions are specified in both auto and homeowners insurance policies.
“Some of our member companies have expressed concerns that their customers are being misled into thinking they’ve sustained storm-related roof or exterior home damage that is actually the result of poor maintenance,” he added. “A 20-year old roof that has broken, worn or loose 15-year-out-of-warranty shingles in disrepair may not necessarily qualify for full-cost roof replacement. It’s fraudulent for an unscrupulous contractor or roofer to misrepresent or purposely damage a roof for the sake of replacing it.”
Policyholders who file a claim may experience a rate increase depending on coverage choices, personal claims history and company. Insurers cannot raise premiums to recoup past losses but can make determinations based on future or potential risk and adjust premiums accordingly. Insurers submit rate filings to the Ohio Department of Insurance with actuarial justification for any proposed rate change. The ODI, as the state’s insurance regulator, reviews such filings and can deny a premium increase or decrease that it does not find to be substantiated.
Homeowners insurance premiums have risen over the past two years,” said Kelso. “The average increase has been $45 over the past two years or less than $2.00 a month–a small price to pay for protecting your biggest investment, your home. Even so, Ohio has the fifth lowest average homeowners insurance premium in the country.”
OII provides the following information to help Ohioans understand the extent of damage caused by Ike and other windstorms, how insurance applies, and how to be better prepared before the next Ohio natural disaster.
Hurricane Ike in Ohio: • Seven Ohioans died as a result of the storm. • 84 counties reported windstorm damage and power outages. State of emergency declarations were issued in 29 counties: Brown, Butler, Carroll, Champaign, Clark, Clermont, Clinton, Columbiana, Coshocton, Delaware, Fairfield, Franklin, Greene, Hamilton, Highland, Knox, Licking, Madison, Marion, Miami, Montgomery, Morrow, Perry, Preble, Richland, Seneca, Stark, Tuscarawas and Warren. • Power outages affected 1.9 million customers making communications between insurers and policyholders initially more difficult. • Counties south of I-70 were hardest hit. According to Ohio insurance companies, claims were concentrated particularly around the Cincinnati, Dayton and Central Ohio areas, although numerous claims were reported in most regions of the state.
Hurricane Ike in the US: • Ike is the fifth costliest US disaster from an insured loss standpoint causing an estimated $12.5 billion in losses. In 2008 dollars, the top five US disasters from an insured loss standpoint are: 1) Hurricane Katrina $45.3 billion 2) Hurricane Andrew $23.8 billion 3) World Trade Center/Pentagon terrorist attacks $22.8 billion 4) Northridge CA earthquake $18.2 billion 5) Hurricane Ike $12.5 billion (also the third costliest hurricane in US history) • According to PCS, Hurricane Ike caused losses in nine states from Texas to Pennsylvania. Texas sustained the brunt of the losses, estimated at $9.8 billion. Ohio was second with $1.135 billion in insured losses, followed by Kentucky, Indiana, Illinois, Louisiana, Missouri, Pennsylvania and Arkansas.
Windstorms and insurance coverage • Property damage from high winds and tornadoes is typically covered under homeowners, renters and commercial insurance policies. Coverage specifics vary by insurer, with some offering additional coverage through endorsements. Deductibles apply. Homes and contents damaged as a result of a fallen tree – whether it’s yours or a neighbor’s – are covered under your homeowners insurance policy. • Typically, costs associated with tree removal are covered up to $1,000 ($500/tree) if the tree was uprooted due to a windstorm or a neighbor's tree was downed under the same circumstances and the tree caused damage to a covered structure such as the roof, garage or shed, or blocked the insured's driveway or handicap access ways. The homeowner’s trees, shrubs, plants or lawn are not covered by high winds if they should be damaged, fall or be uprooted on your premises without coming in contact with an insured structure. • Should an insured's residence be uninhabitable due to a covered loss, most home and renters insurance policies provide coverage known as "loss of use or additional living expenses" that covers motel and meal expenses while their home is being repaired. • Costs incurred from taking measures to protect against further damage (such as placing plastic over a damaged roof, covering windows to prevent further rain damage, etc.) are likely reimbursable under your homeowners policy. Save these receipts. • Vehicles damaged by flying debris or fallen tree limbs are 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. Typically, vehicles that are leased or financed require this coverage. • Coverage for food spoilage varies by insurer. It’s normally excluded if the cause of loss is an off-premises power outage (downed power lines, etc.). Some insurers offer a "refrigerated property coverage" endorsement that provides coverage - typically up to $500 - for frozen/refrigerated items due to loss of power. Contact your insurance professional to see if coverage applies.
General insurance tips • Make sure your policy’s coverage adequately covers your home and its contents. If renting, be sure to carry insurance to protect your belongings. Even if your home’s market value has declined in recent years, it doesn’t mean you should carry less insurance. Insurance should cover the cost to rebuild and replace what you own. According to Marshall & Swift/Boeckh (MS/B), Ohio home construction costs increased 25.7% between 2001-2006. This means a home built in 2001 for $100,000 would cost approximately $125,700 to build in 2006 in the Buckeye State. The US average increase is even higher, 27.7% between 2001-2006. MS/B also reports that 66% of homes were underinsured in 2007. • Create a home inventory and keep it up-to-date. A convenient, downloadable program is free at www.knowyourstuff.org. This will help in the event of filing a claim. • If you experience a loss - Document (photograph/video) any damage and inventory losses, especially if heavy, widespread damage has occurred. - Secure property from further damage or theft. Save all receipts since many insurers will reimburse these expenses. - Contact your insurance agent regarding coverage clarification and damage assessment regarding a potential claim. Insurers have tightened underwriting guidelines and may evaluate all claims filed in recent years which could impact your insurability. - Consider obtaining a written repair estimate prior to filing an auto or homeowners claim, as repair costs may not exceed your deductible. If the estimated repair is just over your deductible, it may not be worth filing. Ask your agent for clarification or assistance.
Home repair & contractor tips To protect against the possibility of dishonest contractors, OII offers the following tips: • Obtain more than one estimate. Don’t be bullied into signing the first contract that is presented to you. • Obtain all information in writing, including cost, work to be completed, repair time and payment schedules, contractor guarantees—and make sure all details are provided. • Ask for references and check them. Your local Better Business Bureau can serve as an additional point of reference. • Ask for the contractor’s drivers license and write the number down along with a description of the vehicle and license plate number. Some contractors come into disaster areas from out of state when damage is widespread and may not be licensed or bonded meaning you may be liable for on-premise injuries. • Never sign an incomplete or blank contract. There’s never a quick fix to home repairs or new roofs as some unscrupulous contractors may lead you to believe. • Never allow your contractor to serve as your negotiator with your insurance company. Should a consumer allow the roofer or contractor to negotiate on their behalf, damage claims may be over-inflated or in some cases, damage may be nonexistent. Insurers are not obligated to cover false or over-inflated claims, which may end up costing the homeowner. • Don’t pay for the repairs or sign a certificate of completion until all work has been completed in accordance with the contract specifications. • Be wary of door-to-door contacts, fliers or telemarketing calls soliciting repair work. The homeowner should take the lead role in contacting companies to handle repairs and not be guided by potentially false or fraudulent marketing tactics. • Watch for padded repair estimates. This is especially true if the repair estimator asks ahead of time for the amount of your homeowners insurance deductible. Often these are included in the repair estimate as an added incentive to use that particular roofer or home repair contractor. • Don’t be tempted to conspire in a fraudulent insurance claim. Insurance fraud is a felony. Disaster repairs often heighten the opportunity for insurance fraud and abuse. Also, be aware that insurance coverage may be void if a policyholder’s intentional misrepresentation is discovered.
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 • Major US catastrophes, Insurance Information Institute • Ohio catastrophes 1998-2009 (UPDATED 9/11/09 at 10 a.m.) • PCS catastrophes news release • Ohio Emergency Management Agency • 2006 US Average Homeowners and Renters insurance premiums
Other Ohio wind and hailstorms Below is a list of Ohio wind/hailstorms that produced significant insured losses (NOTE: Except for storms occurring 2008-09, the June 2007 NE Ohio hailstorm and 1974 Xenia tornado, dollar losses for the following natural disasters are not adjusted to 2008 figures.): • Feb. 11-12, 2009 windstorm caused at least $88.9 million in damages, based on preliminary insured loss estimates from Ohio insurers representing nearly 80% of Ohio's personal auto insurance market, 76% of the homeowners market and about 33% of Ohio’s commercial lines market based on 2007 Ohio premium volume. • Sept. 14, 2008 Hurricane-Ike related windstorm is the costliest Ohio natural disaster in recent times with $1.255 billion in insured losses. • June 8, 2007: Losses from this northeast Ohio hailstorm increased to at least $288 million based on a May 2008 resurvey, setting a record for Ohio hailstorm-related losses based on previous OII survey data. Claims increased 74% – from 29,219 to at least 50,840 according to the resurvey. • October 4, 2006: The most prominent storms produced hail and damaging winds across most of central Ohio. OII’s preliminary estimates show that at least 45,444 claims for $239.6 million in insured losses were filed. • May 17, 21, 26 & 27, 2004: This series of May storms affected Canton, Northeast Ohio, Newark and the greater-Dayton area. Over 44,000 claims totaled nearly $167 million in estimated insured losses. • April 20, 2003: This Easter Sunday hailstorm caused pockets of major damage over the central Ohio area. OII's original survey estimated insured losses at $51.7 million. A follow-up survey in April 2004 found that insured losses had skyrocketed more than four-fold to $230.5 million and that reported claims more than tripled to 36,891. • November 10, 2002: The series of severe storms caused at least $91 million in insured losses from nearly 15,000 claims. Most losses resulted from tornadoes and high winds, but hail was also a factor. • April 9, 2001: A hailstorm in the Dayton-Kettering area caused at least $70 million in insured losses from about 27,575 claims. • April 9, 1999: An early morning F4 tornado that ripped through the Cincinnati area caused at least $66 million in insured losses from about 4,815 claims. Hail was cited in a number of claims. • April 3-4, 1974: Xenia tornado superoutbreak. Total damages, not just insured losses, are estimated at $1 billion in 2008 dollars according to the Insurance Information Institute.