Exclusively from Foa & Son
Spring is the season of unsettled weather, as anyone who follows the news knows. Tornadoes, thunderstorms and hail are the main culprits, although flooding has been an issue (again) the past couple of months. Storms in the middle of the country hit cars and homes with golf ball-sized hail, but even hail the size of a pea can pack quite a punch and cause substantial damage.
Damage to buildings and structures from hail is covered by most property policies; damage to vehicles from hail is covered by the comprehensive physical damage section of auto policies. Comprehensive covers a range of perils, including fire, theft, vandalism, broken glass and such. Interestingly, insurance industry sources report that hail accounted for 42% of all comprehensive auto claims during the second quarter.
As you would expect geography impacts where hail damage is found most often, with the Midwest being the region experiencing the most claims. Nevertheless, increases in hail related claims were widely reported, from Vermont and Delaware to New Mexico and South Dakota and many states in between.
For individuals or businesses insuring just one or a few vehicles hail claims can be an annoyance , but for organizations operating larger fleets in areas prone to hail damage, a hailstorm can leave a large number of vehicles with heavy damage from an event that can last only minutes (the average hailstorm lasts just six minutes). And the out of pocket cost can be heavy if each vehicle is subject to a separate comprehensive deductible for the damage it sustains.
If you think you might be exposed to this type of loss it’s worth exploring a catastrophe cap on the comprehensive deductibles in your fleet policy. For instance, if you have a $1,000 comprehensive deductible per vehicle, many underwriters will offer a cap of three to five times that for comprehensive claims arising from the same event. With such an endorsement your out of pocket costs would be capped even if dozens of vehicles were damaged from the same hailstorm.
Other comprehensive losses are also covered by this; think of vandals attacking a fleet of parked autos, or a fire in an indoor garage. Anyone parking a large number of vehicles in a yard or garage should consider this type of endorsement. It’s cost is typically negligible; give us a call if we can help you with this.