How the hail hazard is affecting property insurance

May 7, 2021 / 2 min read

Hail is a hazard with variable frequency and an irregular geographic distribution, but its extensive damage is leaving an expanding footprint across the United States. And its impact may go unnoticed for years.

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The numbers were predictably high in the vulnerable region known as “hail alley,” a swath that runs through the central United States to Texas. But the area of significant hail exposure has expanded over time, to the point where it demands attention in nearly all states, especially those that are east of the Rocky Mountains.

Gauging the risk at ground level

A decade of hail data illustrates the extreme variability inherent in this evolving peril. Some notable observations include:

Hail activity has fluctuated, reaching extreme highs in 2011 at 9,400, and below-average figures in 2020 at 4,600 events.
Hailstorm events damaged more than 6.2 million U.S. properties in 2020.
More than 1.5 million Texas properties were exposed to at least one damaging hailstorm in 2020—equating to nearly a quarter of all properties exposed in 2020.¹

And while the damage from hail may be slower to emerge, the data underscores the need for a broad view of the risk.

Where to begin your search

When examining hail exposure, location matters, as storms that pass over densely populated areas can produce a higher volume of claims. With more than $14 billion in claims in 2020,² insurers need to diligently monitor hail activity and the potential for damage before the next surge pushes the numbers even higher.

Verisk identified the top 10 hail states for number of affected properties:

Texas
Illinois
Indiana
Minnesota
Missouri
Oklahoma
Iowa
Louisiana
New York
Kansas

Colorado, a frequent hotspot commonly associated with hail, actually fell from the top 10 listing in 2020, although still high on the list overall.

Roof damage: Slow to show itself

Roofs are particularly prone to hidden damage, especially in areas exposed to severe weather events, such as hail. But for many homeowners, roofs are out of sight. It may take months if not years for property owners to detect hail damage, and when they do, they may file a claim with an insurer that didn’t cover the home at the time of the damaging event. Or the effects of hail may make the roof more prone to damage from later events and more likely to leak.

This long tail on hail losses underscores the need for insurers to evaluate address-level exposure throughout the policy life cycle so they can make better-informed underwriting decisions.

Get a fuller picture on hail risk

Confronting hail risk entails an informed strategy and effective tools backed by advanced technology and analytics. Knowing regions that are prone to hailstorms—as well as areas of emerging hail risk—can complement claims data to help insurers uncover pre-existing damage. A clearer picture is possible for insurers to more quickly and thoroughly evaluate and appropriately underwrite properties for hail risk.

For more information on hail risk, read our Ice, Fire, Wind, and Water white paper series.

XactAnalysis data
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