The Columbus Dispatch
This is a new twist for the insurance industry.
Normally, it’s severe storms, tornadoes, hurricanes and wildfires during the spring and summer that produce the biggest catastrophic losses for the industry. This year, it’s snow, ice and cold.
The polar vortex in January and now the 7 feet of snow that has fallen in the Buffalo area this week figure to be the costliest storms for the industry this year, said Bob Hartwig, president of the Insurance Information Institute.
“It’s very unusual for winter-storm losses to be leading catastrophic losses,” Hartwig said.
Winter storms typically produce the third-most-catastrophic losses, totaling 7 percent of all claims, according to the institute. Tropical storms and tornadoes are first and second at 40 percent and 36 percent, respectively.
January’s polar vortex caused about $2 billion in insured losses, Hartwig said.
Cold weather that pushed wind chills as low as 49 degrees below zero, combined with ice, heavy snow and high winds, froze pipes and damaged roofs in Ohio and other states in the Midwest, East and Southeast.
The Ohio Insurance Institute has tabulated the polar-vortex losses in the state at $97.8 million to $124.4 million, making it the second-costliest winter storm since 1993.
It’s far too early to get a sense of the damage caused by this week’s snowstorms in western New York.
Nationwide has reported only a handful of claims so far, and State Farm, the No. 1 issuer in New York, has said it, too, has received just a small number of claims. Nationwide is No. 8 in New York, but a further breakdown about the Buffalo market was not available.
Both insurers expect claims to rise when the weather warms up a bit and homeowners can better assess the damage. There has been so much snow that there have been reports of roofs collapsing under the weight.
The problems in that region might get even worse because flooding is expected as the fallen snow begins to melt over the weekend and rain is forecast.
“It could be weeks before we get a good picture of how bad it will be,” said Missy Dundov, a State Farm spokeswoman.
Claims from winter storms can be costly.
A report issued yesterday by Hartford Insurance said the cost of a claim for damage caused by frozen pipes runs about $18,000, while a claim for a hail-damaged roof might be about $10,000. Downed trees can cause damage of $3,000 to $5,000.
In addition to homeowner claims, Hartwig said there typically is a spike in auto claims from the kind of storms that hit Buffalo because they cause crashes and trees to fall on vehicles.
The snowstorm and the vortex follow what have been several years of extreme weather around the country, including superstorm Sandy, powerful tornadoes and the derecho, which was one of Ohio’s most-damaging storms.
Every year generally produces some kind of extreme weather event that insurers have to be ready for, say those in the industry.