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 saved time and money working with Fletcher Wilson. I will be a customer for life."

Justin Plummer, Crossfit Amplitude

Read what others have to say.

What's New

Claims and Your Insurance Rates

When is it time to contact your auto insurance or home insurance agent to file a claim?

You might be thinking, "Whenever my car or house has been damaged, like by an accident, or a disaster." But deciding whether to file a claim can be a complex process. In some cases, a claim may cause an insurance company to raise your rates.  In other instances, a claim could land your name in a database that might make it difficult to get or maintain coverage in the future.  Before you file a claim, make sure you completely understand how it will impact your future premiums and insurability.
Claims that spike premiums
Certain types of home insurance claims are more likely to trigger an increase in premiums. They include:
1. Dog Bites
2. Water Damage
3. Slip-and-Fall Claims
"The whole point of insurance is to make good on a loss, to make individuals whole again," says Claire Wilkinson, the editor of Terms + Conditions, the blog of the New York-based trade group the Insurance Information Institute. However, many people fear that filing insurance claims will cause them to be "blackballed" by insurance companies, resulting in higher premiums, loss of coverage and difficulties obtaining new insurance. And in some cases, they might be right.  Read more here:
Read More »


What You Should Know About Rental Car Insurance
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 »


5 Ways to Control Rising Homeowners Insurance Premiums
Just as with real estate values, location rules when it comes to homeowners insurance costs. According to the National Association of Insurance Commissioners, the average annual U.S. premium was $842 in 2015, the most recent year for which figures are available. Floridians paid the highest rates, averaging $1,534 a year, while at the opposite end of the spectrum, homeowners in Idaho paid $422.  North Carolina residents averaged $664 per year. 
Fortunately, you can take several steps to bring down the cost of your own homeowners policy, short of packing up and moving:
Read More »