A hailstorm can cause widespread property damage and even physical injuries. While hail continues to severely impact Texas property owners year after year, experts found weather events like hailstorms are now becoming a bigger problem for states across the nation. Knowing what this means for commercial property owners is incredibly important as we enter the 2021 hailstorm season.
Study Shows Hail Damage is Spreading Nationwide
Typically, hailstorms occur within larger thunderstorms as dense ice pellets, called hailstones, abruptly form. These hailstones can vary in size and drop with little warning, quickly causing property damage. Texas is routinely susceptible to the effects of hailstorms and has had more hail and wind claims filed than any other state, but hailstorm impacts are spreading.
A recent study outlines why hailstorms and the resulting damage are quickly expanding across the nation, especially within the central U.S. The study argues that hail is a major impact of climate change and should be taken seriously, and hailstorms have the ability to cause rapid, sudden, and unpredictable physical damage. For instance, in April 2016, Texas was hit with the state’s costliest hailstorm, which resulted in $4 billion in damages.
In regions where hailstorms are common, businesses have adapted to the conditions. For example, roofers and car dealerships in Hail Alley, which stretches from Wyoming to Texas, are used to dealing with these destructive weather events. One of the study’s authors noted that “if you have a hailstorm hit Dallas, there’s a whole market around that.” However, “if you have a hailstorm hit Columbus, Ohio, or Nashville, Tennessee, then it will be costly in ways it wouldn’t be elsewhere.” One of the most concerning aspects uncovered by the study is that hailstorms seem to be moving to new areas at a growth rate of 1.1 percent each year.
Cosmetic Damage Exclusions
As hail is becoming a larger threat, its impacts have affected the commercial insurance market. Many insurers have stopped providing various aspects of commercial coverage for hail damage. For instance, in 2018, the insurance company Zurich North America announced it would no longer offer coverage for hundreds of car dealerships in the Midwest due to substantial hail damage. Furthermore, other insurers that do offer coverage for hail damage have implemented steps to limit payouts for property damage claims. As such, many carriers have adopted exclusions for items like “cosmetic damage” to properties, which would limit coverage to damage that interferes with the function of the property, such as punctures or leaks, but not dents or other damage that affect the appearance of the property
Cosmetic damage exclusions can be difficult to navigate. While some commercial policies exclude cosmetic damage, direct physical losses caused by hail, even if structural damage was not present, may still be covered. In order to properly determine if a property insurance policy affords coverage for physical and/or cosmetic damage, talk to an insurance coverage attorney.
Commercial Property Damage Insurance Attorneys
Dealing with hail damage to a property can be incredibly frustrating for business owners. While some insurance companies have carved out specific exceptions designed to limit coverage for hail damage, others have dropped coverage entirely. In order to ensure your business is protected from insurance companies that may attempt to delay, underpay, or deny valid hail damage insurance claims, contact the insurance coverage attorneys at Raizner Law today for more information on how we can help with your claim.