Hail season is about to arrive and so it’s hard not to think of May 8, 2017.
Late that afternoon, a massive storm barreled through the Denver area, unleashing baseball-sized hail just as many of us were leaving the office for the day.
The damage was widespread, although it was most evident around the Colorado Mills mall on the west side of Denver.
Claims amounted to nearly $1.5 billion, ranking the storm as the most expensive natural disaster in our state’s history.
This is what it means to live in “Hail Alley,” a swath that covers Colorado’s Front Range, parts of Nebraska and Wyoming.
And now, while the rest of the country looks forward to March coming “in like a lion, (and going out) out like a lamb,” we Coloradoans can only nervously anticipate the thunderous hail storms that typically accompany April, May, June, July and August.
How many big storms can we expect this year? No one knows.
What is known is that up to half of your homeowner’s insurance premium may be going to hail and wind damage costs.
What also is clear is that, for many, the days of an insurance company paying in full for a brand-new roof when theirs is damaged in a hail storm are over.
As we’ve reported in the past, a growing number of insurers are adopting a whole new way of calculating what they’ll pay on hail claims.
Rather than covering the full replacement cost, they’re shifting to depreciation schedules that are based on the age of your roof. The older the roof, the smaller the share of the replacement cost that they’ll pay.
Some insurers also are imposing percentage deductibles for hail damage, which can mean you’re responsible for a portion of the loss up to, say, 2 percent of the insured value of your home. For a house insured for $400,000, 1 percent equals a $4,000 deductible.
At the same time, some carriers are increasingly expecting the homeowner to assume a higher deductible. The owner of a home in the $400,000-$750,000 range can now typically expect to have a minimum $5,000 wind/hail deductible.
As you might expect, the type of roof on your home will change the payouts, too. For example, some insurers will cover 70 percent on a 30-year-old slate roof while covering just 40 percent of the cost on a tile roof that is as old.
In short, hail claims just aren’t being handled the way they used to be.
Some advice from the Rocky Mountain Insurance Information Association:
Daniel Rizzo is a CCIG personal lines account manager. Reach him at DanR@thinkccig.com or 720-330-7905.
CCIG is a Denver-area insurance brokerage with the full-service capabilities of a national brokerage. We do more than make sure you have the right policy. We also help you manage your long-term cost of risk with our risk and claims management expertise and a commitment to service excellence.
Did you know? About 60 percent of all U.S. homes are underinsured by an average of 20 percent, according to CoreLogic, a company based in Irvine, Calif., that provides data to most major home insurers. Many factors can lead to being underinsured, including rising labor and construction costs, remodeling or additions since the policy was purchased, and errors in the original policy’s property description.