Designing for the Impacts of Very Severe Hail
Despite the decrease in the number of hail events over the past few years, these events represented a wider geographic footprint and nearly 10 percent more U.S. properties were affected by hail in 2021 than in 2020. This was due, in part, to a growing number of hail events in the eastern United States, which is more densely populated than the traditional “hail alley” states.
According to Verisk’s 2021 report, “The Hail Hazard and Its Impact on Property Insurance,” 6.2 million properties in the United States experienced one or more damaging hail events in 2020, about a million fewer than in 2019. Nearly $14.2 billion in losses were reported in 2020.
With an estimated 1,591,074 properties, representing 17 percent of the state’s total properties, Texas has nearly 1 million more properties affected by hail than the next-highest state, Indiana. The total number of Texas properties affected by hail grew by 80,000 from 2020 to 2021. This accounted for nearly one quarter of all properties affected by hail events in 2021.
Source: NOAA, graphed by Verisk
Figure 3: The estimated number of properties affected by one or more damaging hail events.
Coinciding with the increase in properties affected by a damaging hail event in 2021, there was also an increase in claims, which rose to $16.5 billion from $14.2 billion in 2020. Texas continued to lead with $5.1 billion in claims due to hail damage—nearly a $2 billion increase from $3.3 billion the previous year. Indiana, the second most-impacted state, had nearly an order of magnitude fewer claims than Texas, with $527,000 in claims from the 17 percent of its housing stock affected by hail.
In 2021, more than 6.8 million properties in the United States were affected by one or more damaging hail events. Almost one quarter of the U.S. properties affected by hail were in Texas; over 1.5 million properties. Below are some images from damage resulting from a VSH event.
Images courtesy of USA Today, Reddit, Twitter, and the National Weather Service (top left to bottom right).
Figure 4: April 28th, 2021 – Texas/Oklahoma hail event which produced the largest hailstone measured in Texas at 6.4 inches, the size of a honeydew melon.
According to data from Factory Mutual Insurance Company (FM Global), a leader in establishing best practices to protect buildings, the review of client losses between 2016-2020, showed that the average wind/hail losses averaged $931,000 per event. That’s a significant impact on a business, and it doesn’t account for the other longer-term effects that a disruptive loss could have; impacts on reputation, market share, and investor confidence, for example. This underscores why risk mitigation is so important given such impacts are unlikely to be covered by insurance policies.
VSH Designation
FM Global estimates their clients lose about $130M4 each year on average from hail events in the United States. Instances of severe hail storms are now widespread across the United States. About two-thirds of the U.S. experiences 1-inch or larger hailstones. Given the increasing volume of severe hail events and the resulting property loss, damage, and financial impacts, FM Global added to the requirements in the FM Loss Prevention Data Sheet (LPDS) 1-34 Hail Damage in 2018.
