Auto total loss claims escalate after Calgary hail storm: IBC

The industry is expecting well over 20,000 claims from the recent Alberta hail storm, and some vehicles were wrecked badly enough that they have to be written off, the Insurance Bureau of Canada reports.

“We are hearing from several consumers who are indicating that their vehicle is a total loss,” Rob De Pruis, IBC’s director of consumer and industry relations, western, said Tuesday in an interview.

He was commenting on the storm the evening of June 13 that reportedly dropped hail the size of tennis balls on Calgary and surrounding communities.

“For some of the higher-end vehicles, even the windshield can be a few thousand dollars,” said De Pruis. “Even some of the headlight components on some vehicles, depending on the make and model, can be several thousand dollars each.”

So far about 20,000 property and auto claims have been reported to insurers. “We are expecting thousands more,” De Pruis told Canadian Underwriter.

At the moment, it is difficult to estimate an average dollar value of each claim.

“You are going to have some properties that will essentially need a brand new building envelope for roofing and siding and windows, and other properties may only need to get one face of the roof resurfaced because of the way the damage hit,” said De Pruis. “There are various levels of damage depending on which community you are looking at, and even people a couple of blocks apart have very different damages.”

A vehicle is a total loss if the cost to repair exceeds the price one could get by selling that vehicle. For example, an older, high-mileage vehicle suffering $2,500 in hail damage could be a write-off simply because the resale value is less than $2,500.

In order to claim for auto hail damage in Alberta, a client would need to have purchased optional  comprehensive or all-perils coverage, De Pruis notes.

Some homes had their siding shredded by hail in the June 13 Alberta storm, De Pruis observed.

“We saw windows being broken. We saw windshields and sun roofs being smashed out. We are hearing there is very significant damage to many different roof coverings as well.”

By and large, the most severe damage seems to be in the northeastern area of Calgary. Further north, there was some damage in Airdrie. In 2014, a hail storm in Aidrie cost the industry more than $500 million.

This year’s storm could very well cost more than that, suggested Glenn McGillivary, managing director of the Institute for Catastrophic Loss Reduction, in an earlier interview. ICLR does not do its own estimates, but McGillivary was basing his opinion on the photos and videos, as well as the fact that Calgary is far larger than Airdrie.

IBC expects it will have an industry-wide loss estimate, from Catastrophe Indices and Quantification Inc. (CatIQ), by mid July.

“It is very difficult to predict storms and the damage and severity of some of these storms or where they are going to be impacting. Some of the storms in the past were in less-populated areas, more rural areas, so you don’ t see the same number of properties damaged,” said De Pruis.

The industry has paid out about $4 billion over the past 10 years as a result of damage caused by a couple of dozen Alberta hail storms.

“We have had a handful of other storms that have impacted the Calgary and Airdrie area that have caused hundreds of millions of dollars in damages in the past,” said De Pruis. “Alberta is no stranger to hail.”

Feature image: The Canadian Press/Jeff McIntosh