Insurance losses for 2012's summer derecho storms in the Midwest have reached $845 million in Ohio, nearly double the initial estimate of $440 million announced by the Ohio Insurance Institute (OII) last year.
“Wind losses are tricky to detect initially, and there were likely a number of power outages throughout the state that weren't included in the initial estimate of business losses from a commercial standpoint,” says Mary Bonelli, spokeswoman for the OII. “There may also have been roofers and contractors going door-to-door following the major disasters and identifying damage that consumers might not have thought they had.”
The summer derecho is now the third-costliest catastrophe in the state in terms of insurance losses, coming ahead of Superstorm Sandy, which settled at $292 million. The worst-ever event in the region remains Hurricane Ike, which caused $1.255 billion in losses in 2008.
Derechos, which are fueled by extreme heat, are strong convective storms that travel in packs. Although considered separate catastrophe events, they spur the next storm's strength.
The first storm occurred in the Midwest on June 28, followed by another on July 2. Both caused hail and wind of up to 80 mph, toppling trees and ripping out power lines. The June derecho caused two reports of tornadoes and thunderstorms that snipped electricity service for as many as 4 million customers in the Midwest. The second event produced baseball-sized hail in some areas.
Last year was the second-costliest insurance year in Ohio history. Overall, disaster-related insured losses in Ohio increased 187 percent from 2007-2011, says the institute, and more storms causing $25 million or more in losses occurred from 2010 to 2012 than in the entire previous decade.
The massive March storm was part of a system sprawling from the Gulf Coast to the Great Lakes that blew hail, high winds and tornadoes that killed three people in southwestern Ohio. It caused 2,195 claims and $15.4 million in insured damage.
Bonelli says, “There are new norms here in the Midwest and in Ohio, and insurers are taking a step back to look at their own books of business to make risk adjustments to address these new norms. It's also important to point out that despite of this, premiums in Ohio have remained affordable for both home and auto owners.”
Ohioans paid, on average, $283 less in homeowners insurance than residents in the rest of the U.S. in 2012, according to combined data from the Insurance Information Institute and the OII. The Buckeye state ranks 6th lowest in homeowners and 9th lowest in auto insurance costs in the country.
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