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Insurers Report Increase in Hail Damage Claims

by SuperiorInvest

A meteorology expert responded that it was unclear whether severe hail had increased significantly in the United States in the long term. Harold Brooks, senior research scientist at the National Severe Storms Laboratory, also part of NOAA, said the storm prediction center's hail data should be viewed with caution.

Reports, for example, may be presented by volunteer observers whose training may vary. (Usually, people reporting hail are asked to compare it to the size of a ball or coin, which is then translated to a measurement in inches.) Additionally, the criteria for severe hail were changed in 2010, making historical comparisons difficult.

Still, insurers are reporting higher hail losses. In 2023, State Farm paid 27,300 claims for hail damage to homes and businesses, up from 23,200 in 2022, said company spokeswoman Heather Paul. Payments totaled $6.1 billion last year, more than the previous two years combined.

“We are seeing an increase in severe weather,” Ms Paul said.

Additionally, inflation is raising the cost of materials and labor to repair damage, increasing liability for insurers. A factor also is increased development in areas affected by severe storms. The average State Farm homeowner hail claim last year was about $17,000, up from $16,000 in 2022, Ms. Paul said.

That's a worrying trend for homeowners because the losses mean insurers can become “bold in cutting and reducing coverage,” said Amy Bach, executive director of United Policyholders, a consumer advocacy group. Homeowners and insurance adjusters have suggested that insurers are “getting aggressive” in denying hail claims, she said.

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