Insurance claims for hail damage up 84% since 2010 in the U.S.

Insurance claims in the United States resulting from hail damage increased 84% between 2010 and 2012 and auto hail claims were up six-fold, while thousands of claims were deemed “questionable” due to vendor fraud or inflated loss, according to a recent report.

The National Insurance Crime Bureau released a report Wednesday on hail loss claims and questionable claims in the U.S. In 2010, 2011 and 2012 there were 467,602, 689,267 and 861,597 hail claims respectively, for a three-year total of about 1.9 million.

“The nation has experienced severe storms (wind, tornado, hail) that are occurring with more intensity and affecting more areas of the country,” NICB stated in a press release. “While scientists debate why these storms occur, no one argues with their effects-extensive property damage and, many times, loss of life. The property damage can be as minimal as a few broken shingles to total destruction of buildings.”

Des Plaines, Ill.-based NICB, whose activities include data analytics, investigations, training and advocacy, was formed through the merger of the National Automobile Theft Bureau (NATB) and the Insurance Crime Prevention Institute (ICPI).

In its hail claims report, NICB noted that about one in four claims from 2010 through 2012 were on personal auto policies, and the auto hail claims in 2012 — at 322,719 — were more than six times greater than the number filed in 2010, at 51,345.

“In June, 2012, an outbreak of storms in Colorado caused over $1 billion worth of damage alone,” according to the report, prepared by NICB strategic analyst David Fennig. “Recent trends indicate that these types of storms have only proven to be more widespread and costly.”

Nationwide, 64% of claims were on personal property homeowners policies, 24% were for auto, 4% were for commercial property, 3% were on personal property mobile home policies and 1% were on personal property fire policies.

The report included a table listing questionable claims statistics.

“The referral reason ‘Hail Damage’ was the top referral reason with 3,187 claims from 2010 through 2012 in which that referral reason was used,” according to the report, which noted that each questionable claim must have at least one referral reason listed, but may contain a total of up to seven referral reasons.

From 2010 through 2012, 700 claims were referred due to vendor fraud, 519 due to a catastrophe (hurricane, tornado, wind, fire or hail), 501 due to prior loss/damage and 479 due to inflated damage.

“Property owners must also understand that in the wake of a severe storm, they may be visited by unethical contractors posing as sincere repairmen,” NICB stated in its press release. “Often, these characters will descend on disaster areas and go door to door offering their repair services.  Although most are honest, some are not.”

NICB last April posted a video on Youtube highlighting a test facility in which a hail storm was created indoors in a lab.

An official noted NICB is trying to educate policyholders and insurance carriers on the differences between actual hail damage and damage that has been created by fraudsters.

Officials commenting in the video say they hope the research from the indoor lab hail storm will lead to better building standards and lower insurance losses “within a few years.”

NICB, which has more than 350 employees, has nearly 1,100 members, including property and casualty insurance companies, vehicle rental companies, auto auctions, vehicle finance companies and self-insured organizations.