The cost of homeowners insurance is soaring in states where large outbreaks of tornadoes are becoming more common. But it’s hail — not tornadoes — that are the biggest concern for insurers in the middle of the country, according to industry experts and analysts.
Insurance companies have been raising their rates as the cost of extreme weather disasters grows. In Kentucky, where at least 19 people died after a tornado tore through communities last week, premiums are up 35% from a few years ago, according to the Consumer Federation of America. It’s a similar picture throughout the region. Rates are up 35% in Nebraska, 34% in Arkansas, 32% in Minnesota and 27% in Texas, Colorado and Iowa.
“Even though tornadoes are a much more significant threat to life, most of the insured damages associated with severe weather come from hail,” says Scott St. George, head of weather and climate research at insurance broker WTW. “And the reason for that is because tornadoes are awful and they’re severe, but the footprint of those storms, the areas that are affected by them, is usually still pretty small.”
Hailstorms, on the other hand, cause damage across much larger areas. Hailstones, which can break windows, tear off siding and dent and even puncture roofing material, account for between half and 80% of homeowner insurance claims annually from severe convective storms — thunderstorms that can produce hail and tornadoes — according to St. George.
“My sense from the insurance industry is that hail has become an increasing contributor to claims in recent years due to frequency and severity,” says Ben Keys, a real estate and finance professor at The Wharton School at the University of Pennsylvania. “And so that is driving insurers to respond by raising premiums.”
It’s part of a trend that’s happening across the country. Insurance premiums have risen 24% on average in recent years, according to the Consumer Federation of America. Insurers say they have to raise rates because disasters are getting more expensive. People continue to move to coastal regions vulnerable to hurricanes and to rural parts of the western U.S. that are prone to wildfires. That means more property is in harm’s way. And when homes get damaged or destroyed, inflation has made it more expensive to rebuild.
Below, Minnesota Senator Tina Smith questions Fed Chair Jerome Powell about rising insurance rates and inflation.
Powell told her that he foresees a time in the not too distant future when areas of the country will be uninsurable.
For 40 days this summer, Illinois atmospheric scientist Victor Gensini and roughly 100 other specialists and students traveled the Great Plains chasing storms. More specifically, they investigated severe convective storms, the weather events that cause tornadoes and thunderheads. But their true quarry was something more elusive: hail.
“It’s just an underappreciated peril that causes billions of dollars in loss every year,” said Gensini, based at Northern Illinois University in DeKalb.
Ice falling from the sky is notoriously difficult to study, in part because it melts as it falls or soon after. The project, called the In-situ Collaborative Experiment for the Collection of Hail In the Plains for the pitch-perfect acronym ICECHIP, was the first of its kind in more than four decades and took eight years to organize. As scientists seek to fill gaps in our knowledge of how and where hail falls, climate change seems to be altering the hailstones themselves. A warmer atmosphere, research from Gensini and others published last year in Nature suggests, can make hail bigger, heavier and more damaging to homeowners than more dramatic weather events, including some hurricanes and wildfires.