In­sur­ance pre­mi­ums hefty with more se­vere storms


The fusil­lade was over in a mat­ter of min­utes, but by then 14 peo­ple had been hurt, nu­mer­ous an­i­mals killed, 538 cars to­talled and vir­tu­ally ev­ery roof in the Cheyenne Moun­tain Zoo de­stroyed. Although it was the epi­cen­tre of the fe­ro­cious hail­storm — one that dropped ice bombs the size of base­balls — the ac­claimed fa­cil­ity had much com­pany in its mis­ery in Au­gust. The famed Broad­moor re­sort suf­fered ex­ten­sive dam­age, with its golf course left a crater­pocked mess. Thou­sands of homes had their roofs shred­ded, even those capped with one-inch-thick con­crete tiles.

“It was like some­one dumped a bat­ting cage from heaven,” zoo CEO Bob Chas­tain said. His staff, which re­cently re­ceived ini­tial dam­age es­ti­mates from the zoo’s in­sur­ance car­rier of US$4.5 mil­lion, is still mourn­ing the crea­tures lost, in­clud­ing a pea­hen named Katy Perry. “One per­son’s watch ex­ploded when it was hit by hail, and an­other got hit so hard in the head it dented their hard-hat. Some­one at the hospi­tal said with­out that they would have suf­fered se­vere in­juries.”

The mile-high plain along Colorado’s Front Range sits within a re­gion known col­lo­qui­ally as “hail al­ley,” which ex­tends from Texas and Ok­la­homa up into the Dako­tas. This is ground pounded year af­ter year by the high­est fre­quency of large hail in North Amer­ica, and as the met­ro­pol­i­tan ar­eas nes­tled at the base of the Rocky Moun­tains here keep grow­ing, the po­ten­tial for greater and more costly de­struc­tion keeps grow­ing, too. This year is lin­ing up to be the 11th in a row in which hail-pum­meled home­own­ers in­cur at least US$10 bil­lion in losses, which rep­re­sents al­most 70 per cent of in­sured prop­erty losses from se­vere storms an­nu­ally. The mount­ing sums have prompted a re­nais­sance in hail re­search, with sci­en­tists try­ing to com­pre­hend what causes these cat­a­clysmic tem­pests and if they could worsen as the planet warms. The im­pacts are out­pac­ing ad­vances in fore­cast­ing, de­tec­tion and mit­i­ga­tion. Com­pared with tor­na­does, wild­fires and hur­ri­canes, hail­storms are un­der­rated and lit­tle-un­der­stood. Yet they are a cli­matic phe­nom­e­non re­spon­si­ble in the U.S. for caus­ing about as much dam­age in an av­er­age year as hur­ri­canes. “There is a lot of un­cer­tainty,” said An­dreas Prein, a sci­en­tist at the Na­tional Cen­ter for At­mo­spheric Re­search who stud­ies se­vere thun­der­storms and cli­mate change. Based on data from high-res­o­lu­tion mod­els that test how hail­storms might be­have by the end of the cen­tury, he ex­pects they will un­leash larger rather than smaller stones. “There is a real threat that cli­mate change will in­crease the haz­ard quite a lot.” What is al­ready clear is that ex­treme storms ca­pa­ble of spawn­ing hail are be­com­ing more fre­quent and more in­tense, said Prein, who pre­sented his re­search at a firstof-its-kind hail con­fer­ence in Boul­der just one week af­ter Colorado Springs was bat­tered. The huge fi­nan­cial losses recorded to date re­flect not only the boom­ing pop­u­la­tion in hail-prone com­mu­ni­ties but also what peo­ple are con­struct­ing.

Ian Gi­ammanco stud­ies the ef­fects of se­vere weather on the built en­vi­ron­ment as lead re­search me­te­o­rol­o­gist at the In­sur­ance In­sti­tute for Busi­ness & Home Safety. “Places that were open fields and farm­land 20 years ago are now dense sub­ur­ban ar­eas,” he noted re­cently. And the houses go­ing up, which in the early 1980s were about 1,700 square feet, ex­ceeded 2,500 square feet in 2015: “With large homes, you get big­ger roofs, and more ma­te­rial that has to be re­placed when a hail event hap­pens.”

Colorado ranks third in the na­tion for the fastest-ris­ing auto and home­own­ers’ in­sur­ance rates, largely be­cause of the “cat­a­strophic cy­cle of year af­ter year of record-break­ing hail storms,” said Ca­role Walker, ex­ec­u­tive direc­tor of the Rocky Moun­tain In­sur­ance In­for­ma­tion As­so­ci­a­tion. In some cases, cus­tomers’ pre­mi­ums ri­val what Cal­i­for­ni­ans may pay for earth­quake in­sur­ance.

The state’s most ex­pen­sive in­sured dis­as­ter is a US$2.3 bil­lion hail­storm that hit sub­ur­ban Den­ver neigh­bour­hoods on May 8, 2017. It pul­ver­ized an en­tire mall, forc­ing scores of busi­nesses to close and putting thou­sands tem­po­rar­ily out of work.

The pre­vi­ous year in hail al­ley, mil­lions of peo­ple in Texas had suf­fered US$6.1 bil­lion in home and auto losses from hail and wind, with in­sured hail losses amount­ing to two-thirds of all home­owner claims that state res­i­dents filed in 2016, ac­cord­ing to a spokesper­son for the In­sur­ance Coun­cil of Texas. In Colorado Springs, about an hour’s drive south of Den­ver, res­i­dents had scarcely re­cov­ered from what some called a 25-year hail event June 13 when the Aug. 6 storm hit the zoo and the sur­round­ing area. About 50,000 homes were be­sieged by both storms. “There was hail in peo­ples’ liv­ing rooms — it punched through the shin­gles and the ply­wood,” said Michael Moore, owner of Divine Roof­ing. “It ex­posed as­bestos and lead paint, leav­ing some fam­i­lies to live in ho­tels for three or four months while their homes are re­me­di­ated.”

The one-two punch also left more ve­hi­cles dam­aged than not and forced some lower-in­come res­i­dents to spend pay­outs they re­ceived for dam­aged roofs on new cars just to get to work. Some res­i­dents had just pur­chased a new car af­ter the first storm, only to have it to­talled by the sec­ond.

“It’s like ve­hi­cles got rolled in a ditch,” said James Bishop, owner of the Ding Guy, who has ap­point­ments booked into Fe­bru­ary. “The re­pair tick­ets are huge — in the US$15,000 to US$20,000 range.” The Den­ver met­ro­pol­i­tan area, which has mush­roomed to 3.5 mil­lion peo­ple, has hardly been spared. “Ma­chine-gun” hail wiped out sub­ur­ban farm­ers’ crops in early spring and then again in Au­gust. Those smaller op­er­a­tions don’t qual­ify for crop in­sur­ance, and sev­eral have turned to on­line fundrais­ing cam­paigns to stay afloat.

“Ev­ery­thing in the area that had leaves lost at least half of them,” wrote Erin Dreis­tadt and Ja­son Grif­fith, co-own­ers of Aspen Moon Farm, on their web­site. “Small sprouts and shoots were es­sen­tially pounded flat. Our beau­ti­ful sugar snap peas looked like they had been tram­pled by a herd of wild horses.”

Some home­own­ers in the sub­urb of Aurora are re­plac­ing roofs for the fourth time in seven years. And even be­fore the side­walks were dry af­ter an Au­gust hail­storm there, roof­ing com­pa­nies guided by apps that pin­point dam­aged homes de­scended on neigh­bour­hoods in droves. The un­so­licited door-knock­ing went on for days, prompt­ing one fam­ily to tape a sign in the front win­dow: “Do Not Knock On Our Door — Un­less You’re Sell­ing Girl Scout Cook­ies.” The Greater Den­ver and Cen­tral Colorado Bet­ter Busi­ness Bu­reau logged 283 com­plaints about roofers in 2017 and 290 so far this year, said Ezra Coop­er­smith, its in­ves­ti­ga­tions co-or­di­na­tor. “Ev­ery storm, we have more (fraud) cases, more scams and more con­sumers get­ting hurt,” said Jeff John­ston, pres­i­dent of the Colorado Roof­ing As­so­ci­a­tion, who ac­knowl­edged that hun­dreds of com­pa­nies so­lic­it­ing do not carry proper in­sur­ance and charge cus­tomers up­front, only to do shoddy work or dis­ap­pear. Back in Colorado Springs, Divine Roof­ing ’s Moore said he is al­ready fix­ing leaks in roofs re­placed by con­trac­tors that did not re­spond when home­own­ers tried to in­form them of prob­lems. He ex­pects such work to es­ca­late as win­ter de­scends. “We haven’t seen the end of it yet,” Moore said. “Some peo­ple are go­ing to be wait­ing well into next year to get their roof done.”


Crews clean up the de­bris from a hail­storm at Cheyenne Moun­tain Zoo in Colorado Springs, Colo., in Au­gust.


Hail the size of base­balls lies on the ground near the Broad­moor Ho­tel in Colorado Springs, Colo., af­ter a storm hit parts of El Paso County in Au­gust.


Katy Perry the pea­hen was killed when hail hit a Colorado Springs zoo.

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