Ohio Insurance Institute: State’s Insured Losses from Ike – $1.255B

For some Ohioans, the memory of Hurricane Ike is only surpassed by the damage it caused last Sept. 14 as it made its way across the Buckeye State packing winds at speeds equal to a Category 1 hurricane (up to 74 mph).

Strong winds moved diagonally across the state from southwest to northeast over a four-hour period that Sunday afternoon, according to Ohio EMA reports. Losses compiled by insurance companies and state government mounted over time, capping Ohio’s largest natural disaster in recent history – the Xenia tornado of 1974.

According to Property Claim Services (PCS), which provides property loss and catastrophe information for the property/casualty insurance industry, Ohio’s insured losses from Hurricane Ike are now estimated at $1.255 billion. The Ohio and Federal Emergency Management Agencies project local government costs for protection and clean up at an additional $38.6 million.

According to the Insurance Information Institute, total damages from the Xenia Super-outbreak are about $1 billion in 2008 dollars.

“The message for Ohioans at this one-year anniversary mark is not just its record losses, but to serve as a reminder that we are not immune to natural disasters,” said OII President Daniel J. Kelso.

Insurance companies reported a record-high number of Ike-related claims were filed across the state. PCS estimates that at least 270,000 claims have been filed in Ohio including 220,000 homeowners, 30,000 commercial and 20,000 auto insurance claims.

“From a claims-handling standpoint insurers were truly tested,” said Kelso. “Many of our companies were servicing claims in multiple Ike-damaged states simultaneously.”

Even with a record number of claims, OII reported that insurers had closed an average of 95 percent of their Ike windstorm claims by March, most within 10-90 days and well within the six-month period following the storm.

The Institute joins the Ohio Department of Insurance in reminding those who think they may have sustained damage due last September’s windstorm to review their policy language as it pertains the time frame in which a storm-related claim must be filed.

Some companies require their policyholders to file a claim within a year of the loss. Others do not state a specified time frame, but contractually indicate that a claim should be filed “within a reasonable time from when the damage is first noted”, “promptly,” or wording similar to “immediately notify your company of a loss.” Claims filing conditions are specified in both auto and homeowners insurance policies.

“Some of our member companies have expressed concerns that their customers are being misled into thinking they’ve sustained storm-related roof or exterior home damage that is actually the result of poor maintenance,” Kelso added. “A 20-year old roof that has broken, worn or loose 15-year-out-of-warranty shingles in disrepair may not necessarily qualify for full-cost roof replacement. It’s fraudulent for an unscrupulous contractor or roofer to misrepresent or purposely damage a roof for the sake of replacing it.”

Policyholders who file a claim may experience a rate increase depending on coverage choices, personal claims history and company. Insurers cannot raise premiums to recoup past losses but can make determinations based on future or potential risk and adjust premiums accordingly. Insurers submit rate filings to the Ohio Department of Insurance with actuarial justification for any proposed rate change. The ODI, as the state’s insurance regulator, reviews such filings and can deny a premium increase or decrease that it does not find to be substantiated.

Homeowners insurance premiums have risen over the past two years,” said Kelso. “The average increase has been $45 over the past two years or less than $2.00 a month – a small price to pay for protecting your biggest investment, your home. Even so, Ohio has the fifth lowest average homeowners insurance premium in the country.”

OII provides the following information to help Ohioans understand the extent of damage caused by Ike and other windstorms, how insurance applies, and how to be better prepared before the next Ohio natural disaster.

Hurricane Ike in Ohio:

• Seven Ohioans died as a result of the storm.
• 84 counties reported windstorm damage and power outages. State of emergency declarations were issued in 29 counties: Brown, Butler, Carroll, Champaign, Clark, Clermont, Clinton, Columbiana, Coshocton, Delaware, Fairfield, Franklin, Greene, Hamilton, Highland, Knox, Licking, Madison, Marion, Miami, Montgomery, Morrow, Perry, Preble, Richland, Seneca, Stark, Tuscarawas and Warren.
• Power outages affected 1.9 million customers making communications between insurers and policyholders initially more difficult.
• Counties south of I-70 were hardest hit. According to Ohio insurance companies, claims were concentrated particularly around the Cincinnati, Dayton and Central Ohio areas, although numerous claims were reported in most regions of the state.

Hurricane Ike in the US:

Ike is the fifth costliest US disaster from an insured loss standpoint causing an estimated $12.5 billion in losses. In 2008 dollars, the top five US disasters from an insured loss standpoint are:

According to PCS, Hurricane Ike caused losses in nine states from Texas to Pennsylvania. Texas sustained the brunt of the losses, estimated at $9.8 billion. Ohio was second with $1.135 billion in insured losses, followed by Kentucky, Indiana, Illinois, Louisiana, Missouri, Pennsylvania and Arkansas.

Source: Ohio Insurance Institute