June hailstorms caused an estimated $5.5B in insured losses: KCC

By Erin Ayers, Advisen

An outbreak of severe convective storm (SCS) activity from June 10-19 is expected to have cost an estimated $5.5 billion in insured losses across 25 states, according to catastrophe modeler Karen Clark & Company.

“Dozens of instances of softball-sized hail were reported across Texas, Arkansas, Mississippi, and Georgia and extreme wind gusts exceeding hurricane-force were measured throughout the South,” said the modeling firm in a statement. “While hail and winds were the dominant features of this event, several damaging tornadoes also formed.”

KCC tracked 1,557 reports of hail, 93 reports of tornadoes, and 2,719 reports of damaging wind gusts from this multi-day event. Of the hail reports, 18% were considered “severe” or related to hailstones more than two inches in diameter and hail seen in Mississippi and Arkansas neared state records of five inches in diameter.

“Historically, the U.S. has had an average of one severe convective storm outbreak per year with this level of damage,” KCC said in its report. The modeler’s estimates include damage to insured residential, commercial and industrial properties, and automobiles.

A report from broker Aon’s impact forecasting team found that the storms left “tens of thousands” of people without power and caused at least three deaths and dozens of injuries.

“The prolonged mid-June outbreak of severe storms will likely add a notable amount of economic and insured losses to an already high seasonal total. Due to widespread impacts from hail, strong winds and tornadoes across multiple states, total financial toll from the outbreak was initially anticipated to be in the hundreds of millions USD, possibly higher,” Aon reported.

The state of Texas incurred the most damage, followed by Arkansas, Oklahoma, Mississippi, Louisiana, and Alabama.

Insured losses in Texas alone are expected to exceed $1 billion, KCC said in an earlier statement. The state faced “near-daily thunderstorms” that were stronger than average as weather conditions supported “long-lived” updrafts that allowed large hailstones to form and remain suspended in the air for longer.

“The stationary front that extended across the South acted like a barrier and prevented the warm, humid air mass emanating from the Gulf of Mexico from moving northward and diffusing. The steady onshore winds repeatedly replenished the heat and moisture that had been utilized each day by convective storms,” KCC explained.

The United States saw 4,436 hailstorms in 2022, according to the Insurance Information Institute (III). These types of property damage claims have become increasingly expensive and frequent. In March 2023, State Farm reported a $1 billion uptick in the cost of hail claims between 2021 and 2022, up to $3.5 billion. In addition to more claims occurring – nearly 45,000 more in 2022 – the insurer attributed the increase to inflation and supply chain issues.

“The average claim increased by nearly $2,000 last year,” said State Farm in a statement. “That is the largest year-over-year increase to date.”

Managing Editor Erin Ayers can be reached at erin.ayers@zywave.com