Significant losses posted by Ohio insurers from June-July ‘derecho’ storms
COLUMBUS (August 13, 2012) – After a relatively calm winter and spring, a round of summer storms socked Ohioans and their insurers in late June-early July with losses of at least $433.5 million.
According to the Ohio Insurance Institute (OII), this is the third costliest natural disaster to hit the Buckeye state in recent times, behind the September 14, 2008 Hurricane Ike windstorm and the April 3-4, 1974 Xenia tornado super-outbreak. Statewide preliminary estimates find insured losses totaled $433.5-$440 million from the six-day period, June 28-July 4.
Ohio claims from the summer “derecho” storms are estimated at 96,725–107,300. A derecho, according to the National Oceanic and Atmospheric Administration (NOAA) Storm Prediction Center, is a widespread, long-lived windstorm associated with a band of rapidly moving showers or thunderstorms. A derecho can cause tornado-like damage, but is typically along a relatively straight swath, also described as “straight-line winds.” By definition it includes wind gusts of at least 58 mph along most of its length.
Property Claim Services reports that the June 28-July 2 storms affected IL, IN, KY, MD, NJ, NC, OH, SC, VA, WV and Washington D.C. Damages due to flood, hail, tornadoes and high wind caused overall losses of $1.125 billion. PCS reports the July 2-4 storms caused an additional $300 million in losses in five states including OH, MI, MN, PA and WI. In both of these storm events, PCS ranks Ohio as having the highest dollar loss estimates.
According to OII President Dan Kelso, this is the eighth major natural disaster to hit Ohio since 2011, which includes two winter storms in 2011 and six wind-hail storms. (See Ohio’s winter and wind/hail loss histories for recaps of these events.)
According to the Ohio EMA situation reports, five Ohio deaths are blamed on these storms. One was from a barn collapse and the other four were heat-related.
June-July Ohio derecho and storm recap
June 29 derecho
According to the National Weather Service (NWS), the June 29 derecho traveled 600 miles in 10 hours with an average speed of 60 mph. Over 800 preliminary thunderstorm/wind reports were taken with peak wind gusts of 80-100 mph. As many as 4 million customers from Indiana to Virginia lost power, including over a million across the Buckeye state. It was declared a federal disaster in Ohio on June 30.
NWS Wilmington: High winds gusting in the 80 mph-plus range were reported in several communities including Coldwater, Dayton, Gahanna and Lancaster. Localized hail was also reported.
NWS Cleveland: Two unconfirmed tornadoes were reported near Newcomerstown, Tuscarawas County. High winds uprooted trees and downed power lines. Hail was also reported. 80 mph-plus winds were reported including in Findlay and Edison.
July 1 severe weather
NWS Wilmington: In the wake of the June 29 derecho, another severe weather event occurred two days later. Thunderstorms moved through the Miami Valley and parts of central Ohio, producing large hail and damaging winds. Some wind damage was significant, especially in Miami and Clark Counties. Further south, additional thunderstorm cells produced damaging winds and large hail. A strong storm over northern Clermont County produced golf-ball sized hail, while a super-cell over Ross County produced baseball-sized hail.
OII preliminary summer storm loss estimates
27 property/casualty insurance companies participated in the OII June-July summer storm survey. They represent over 76 percent of Ohio’s personal auto market, over 73 percent of the homeowners insurance market and over 30 percent of Ohio’s commercial lines market based on 2011 Ohio market share figures. Initial insurance company claims estimates ranged from one to 17,900. Insured losses reported by companies varied from $20,000 to nearly $61 million.
• Claim estimates: 96,725
Homeowners: 74,606 • Auto: 15,705 • Business: 6,083
• Loss estimates: $433.5 million
Homeowners: $328.4 million • Auto: $34.4 million • Business: $65.6 million
OII survey findings show that the majority of claims reported to-date (about 78 percent) pertain to homeowners or renters insurance. The storms caused wind and hail damage to roofs, gutters, siding, windows and outdoor property. Refrigeration losses and business interruption claims were also notable due to the duration of power outages and high temperatures throughout the state.
PCS preliminary estimates
PCS shows Ohio’s insured loss estimates at 107,300 claims totaling $440 million for this six-day period of storms.
“Not all insurance companies are represented by OII’s survey or PCS findings. Final losses will likely be higher than these preliminary estimates,” said Kelso.
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/tarp 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 when you suspect the damage is close to your deductible.
Expenses incurred out-of-pocket (not covered by insurance) can be claimed as a loss on your 2011 federal income taxes due to Ohio’s federal disaster declaration. OII advises maintaining records and keeping expense receipts to review with a tax specialist to ensure compliance with the federal tax filing process.
Damage from flooding is excluded from standard homeowners/renters and business insurance policies. 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: Homeowners, renters and commercial insurance policies cover damage caused by high winds, tornadoes and hail. 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.
• 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.
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.
• OII winter storm history through July 2012
• OII wind and hail storm history through July 2012
• ISO interactive map: Insured losses from natural disasters by state
• OII home repair tip sheet
• Insurance Information Institute “Trees and Insurance”
• Property Claim Services