May Hailstorm in Texas Costs Insurers $500 Million

Texas hailstormA May hailstorm that packed strong winds, rain and golf ball- to apple-size hail when it swept through Amarillo, Texas has racked up $500 million in insured losses, according to the Insurance Council of Texas citing Property Claim Services.

Source: Source: BestWire | Published on August 26, 2013

severe convective storms

The storm moved directly through the center of Amarillo in the Texas Panhandle, damaging about three-quarters of residential property in the city. It's now the city's costliest weather event on record, the ICT said in a written statement.

"The Amarillo hailstorm just became the 10th costliest storm on record in the state," said Mark Hanna, an Insurance Council of Texas spokesman. "The losses from this hailstorm are comparable to Hurricane Dolly that struck South Padre Island back in 2008."

The storm system moved out of the Texas panhandle into Oklahoma, where it caused an additional $450 million in damage, according to the ICT. In all, seven states were affected by the storm system with insured losses totaling $1.3 billion.

Early indications from the storm was that it would be a large loss, with the ICT estimating only days after the storm that insured losses would easily top $100 million.

The Amarillo storm was just one of a few hailstorms that pummeled Texas earlier this year. Severe weather, including tennis- to softball-size hail and tornadoes, raked several communities May 15 near Fort Worth, Texas (Best's News Service, May 16, 2013). An April 2 storm hammered Marble Falls, Texas, which is near Austin.  That storm was expected to bring in as many as 5,000 claims.

The property catastrophe risk market in Texas in 2012 reported direct premiums written of $20.6 billion, which is up from $17.5 billion in 2008, according to BestLink, A.M. Best Co.'s online financial system. The average property catastrophe risk adjusted loss ratio in 2012 was 61.98. Property catastrophe risk is a combined category that includes multiple lines such as fire, allied lines, homeowners and commercial multiple peril, among others.