Last Week's Tornado Losses Will Likely Cost Insurer's Over $1 Billion

Winston-Salem, NC 3/9/2012

In the aftermath of last week’s devastating tornadoes, independent agents and carriers are working to handle volumes of claims for those affected by the storms in the Midwest and South.  Two forceful storm systems swept through the regions, spawning a series of twisters that destroyed communities and left dozens reported dead. Some of the hardest-hit states include Illinois, Indiana and Kentucky. 

 
While the amount of insured damage from the storms on Feb. 28 to 29 and March 2 to 3 is still being tallied, catastrophe modeler EQECAT pegged its initial estimate of insured losses at $1 billion to $2 billion.  On March 2 alone, there were 107 tornadoes—the most for the year so far, according to the National Weather Service.
 
Already, 2012 has an above-average start for catastrophes. The number of tornadoes so far this year—272—is more than twice the seven-year average of 123 for the same time period, according to EQECAT.  They follow a trend of significant disasters in recent years and come on the heels of a costly year for tornadoes in particular. In 2011, insured losses from tornadoes and thunderstorms totaled more than $25 billion, which is more than twice the amount of the previous record, according to the Insurance Information Institute.
 
To date, Ohio-based carrier Westfield Insurance has received about 450 claims related to last week’s storms, says Corry Novosel, director of the company’s catastrophe claims operations.  “The severity of the losses is very high,” says Novosel, whose company offers business and personal insurance in several of the affected states. “That’s very common with tornado damage.”
 
The storms also carried significant hail, which is also causing a lot of claims, Novosel says.  In areas such as Kentucky, there have been reports of baseball-sized hail, which can cause serious damage to roofs, porches, windows and siding because of its mass.
 
Roughly 70% of Westfield’s claims are filed through agents, with the remainder submitted directly by policyholders, Novosel says.  “You can imagine when a tornado or hail hits [for example in] Louisville, those agents there are going to be extremely busy for a week or two because their phones are going to be ringing off the hook with people wanting to report their claims,” he says. 
 
While there’s an immediate influx of severe claims from tornado losses, hail-related claims tend to trickle in for months—even up to a year—after a storm, he notes.  Often, damage from hail is more cosmetic and may be noticed later. That’s been especially true in recent years, when roofing companies have offered free inspections for homeowners near areas affected by tornadoes, with the hope of generating new repair business if they discover any hail damage, Novesel says.
 
Meanwhile, in responding to catastrophic claims, Novosel says his company prioritizes open communication with agents to keep them updated.  “We need to make sure that they can get those claims to us,” he adds.
 
Westfield’s communications team uses different ways to regularly stay in touch with agents—from updating the company’s website to sending out emails—on information such as how many adjustors will be in the field, where they’ll be based and the best way to contact company representatives, he says.
 
Within 48 hours of a catastrophe, the company typically deploys its own adjustors to affected areas and encourages field staff to visit agencies to let them know they’re there and work as closely with them as preferred by agents, Novosel says. For last week’s storm, Westfield has teams in Cincinnati, Louisville, Ky., and Nashville, Tenn.
 
The amount of time adjustors stay in the field can range from three to six weeks, depending on the number of claims submitted. The company strives to resolve storm claims within 30 to 60 days of being filed, he adds.
 “You want to show up and be there for your policyholders and make your agents in that area look good, and be the guys that responded when tragedy struck,” he says.
 
Reviewed your homeowner's policy to make sure you are appropriately protected.   If you live in North Carolina, now is the time to review your coverage and brace for another active tornado season.  Please contact us with any questions.

View All News Articles

What Our Customers Say!

"I wanted to let you know what outstanding customer service I experienced today. Jennifer Wakefield contacted me because she had been notified  that I purchased a new car and had not yet reported it on my auto policy.  At the time I purchased the car, the dealership assured me they would be contacting your agency to make the switch and to verify that I had certain levels of coverage.  Imagine my dismay to learn that five weeks had gone by, and this call had not been made!  Jennifer took care of all the loose ends for me and was very kind and responsive throughout all of our communications.

I have had Home, Auto and Umbrella Liabilty coverage through your agency for four years.  Every time I contact your staff,  I am blown away by how helpful and kind everyone is, and how consistent your service remains, regardless of who I am speaking with.  You have a fantastic team of employees.   Keep up the great work!"

Meghan Claffey Cline, MHS - Nutritional Interventionist, Wake Forest University

Read what others have to say.

What's New

Wilson Insurance Services Team!
2/22/2018

 Our newest team photo!

Read More »

 

What You Should Know About Rental Car Insurance
2/1/2018
There are some very serious contractual gaps in coverage for rental vehicles. Even if you purchase their Collision Damage or Physical/ Loss Damage Waivers, many rental car contracts exclude the following:
  • Theft of the Vehicle
  • Tolling, or Turning the Vehicle Over
  • Lease Gap coverage
  • Loss of Use
  • Glass, Tire and Undercarriage Damage
  • Animal Collision
  • Flood and Hail Damage
  • Damage above the Windshield
  • Individuals who rent personal vehicles for extended periods and do not have a Personal Auto policy in force
  • Drivers who rent, and do not own another vehicle insured elsewhere, need to be expecially careful here
Read More »

 

The Five Costliest Traffic Tickets for Auto Insurance
1/15/2018

Those whirling blue lights in the rearview mirror usually mean just one thing: It's traffic ticket time. The worse the violation, the more your car insurance costs may rise because it's more likely you'll be considered a bigger risk to the insurer.  Rack up a combination of the nastiest violations plus a few accidents, and insurers may even refuse to cover you, says Loretta Worters, spokeswoman for the Insurance Information Institute, a trade group.

 
It boils down to matching the premium you pay to your risk as a customer, says State Farm spokesman Dick Luedke. "Sometimes you get lucky and violate (traffic laws) a lot and don't get caught, and sometimes you do it once, and you are caught," he says. "That's why we use all sorts of other things to measure risk as well." So it's tough to say how much your insurance premiums will rise per violation. Different insurers calculate premium costs differently, Worters says. With the help of experts, including J. Robert Hunter, insurance director for the Washington, D.C.-based Consumer Federation of America, we now identify what are considered the five worst traffic violations for your insurance bills:
Read More »