Is hail getting worse? Should you worry more about potential crop damage, your insurance coverage, and the longevity of your business when it comes to this icy weather event?
Table of Contents
• According to insurance statistics, hail insurance claims are going up.
• Hailstorm damage and frequency are both increasing with intensity.
• “Hail Alley” – And how it’s changing over the years
• Hailstorms are becoming more commonplace and destructive in areas where they weren’t before.
• Which areas are the most likely to experience hailstorms and hail damage?
• How much in damages are hailstorms causing?
• Farmers: don’t overlook the importance of hail insurance this spring.
Word is going around (and farmers themselves report) that hailstorms could be getting more intense, more frequent (in certain areas), and popping up more and more intensely in areas where they weren’t as common in the past. But what do the statistics say? What does this mean for you as a grower and for your crop insurance?
During this spring season — and with hailstorms taking a turn for the worse around the world and in the U.S. in recent years — considering a hail insurance policy is a worthwhile measure to take for the well-being of your operation. Here are some statistics about hailstorms, agriculture, and why crop insurance matters when it comes to hail and farming.
According to insurance statistics, hail insurance claims are going up.
There aren’t many statistics specifically on hail insurance claims for agricultural crops out there. Nevertheless, the stats across the entire insurance industry (including hail property damage) are quite telling in terms of the direction where general hail insurance coverage is headed: and that direction is upwards.
The Rocky Mountain Insurance Information Association, along with the NICB, indicate that claims for hail damage have gone up over the recent years of 2018 through 2020. Standard claims went up by 2%, with the actual number of claims jumping up by over 100,000 between 2018 and 2019.
Meanwhile, QC claims related to hail damage (QC meaning Questionable Claims, or claims insurance companies suspected were fraudulent), went up by 34%, over one-third from previous years. This is substantial! Even with a rise in mostly Questionable Claims alone (with some of them proven to be legitimate, others not), this indicates a steep trend of hail incidents so severe that farmers and property owners alike are needing to lean on insurance for better security more and more.
Again, while there aren’t statistics like these on hail insurance for crops, the insurance industry overall — both farmers and insurers — are braced for these general trends. Farmers on the ground can speak to there being greater fears around hail damage now more than ever…something a proper hail insurance crop policy could address.
Hailstorm damage and frequency are both increasing with intensity.
More and more hailstorms are happening in recent years. When they do, they’re worse than usual, studies show. Climate data from these studies also expect that gradually rising temperatures will enable MORE hailstones to form when these events take place; research shows that warming temperatures enable both the formation of more hailstones in storms and a greater chance of landfall as a result. Worse: hailstones that do make landfall are starting to get larger and larger on average!
That said, surveys of row crop farmers show that large hailstones aren’t necessarily the kind of hail they fear the most. Rather, high volumes of small hail moving at high speed, such as in a windstorm, are shown to inflict far more damage on crops than large hail (think of a shotgun vs. a rifle blast). Still, this type of dangerous hail — sometimes called the “icy combine” because of what it does to crops — could also become more likely thanks to increasing temperatures.
Larger hail over time may also be a greater threat to livestock farmers than row crop farmers. Not to mention: larger hail creates hazards and damage to infrastructure, buildings, and mechanical equipment for farmers of all kinds, no matter what they produce.
While hail insurance or crop insurance won’t cover the direct death or loss of livestock to injury or hail incidents — nor can it cover damage or destruction of farm buildings or equipment — it can protect what farmers grow along with their revenue by compensating for losses due to hail damage to crops in the field. (Not to mention, hail insurance can cover a LOT of other perils besides hail!) One of the big selling points is that hail starts covering on the very 1st acre. Most farmers now have EU (enterprise unit) coverage on their multi-peril crop insurance plan. This means all acres of the given crop are insured as a single unit and you must have a loss based on the production from all of your acres added together to be paid an indemnity. Hail is the perfect compliment to the EU policy since it starts paying on acre 1.
“Hail Alley” – And how it’s changing over the years
It’s just the way insurance works: if you’re in an area more prone to certain weather, your premiums on that type of weather are going to be higher as a result. That’s not a bad thing.
The region known as Hail Alley in the U.S. is a perfect example. All up and down this corridor you may find higher hail insurance rates from some insurance companies if you want a policy that fully protects you from damage. That said, the rates are probably more than worth the price considering the losses they could inflict on your business. All farmers know that a hailstorm could make or break a successful year of production, or even an entire business. Here’s the thing…
Hailstorms are becoming more commonplace and destructive in areas where they weren’t before.
In the past, the region known as Hail Alley historically spanned out east from Wyoming to Nebraska, then down through eastern Colorado. Some experts insist it stretches even further down into Oklahoma, Kansas, and the Texas Panhandle.
However, research is showing that the nature and area of Hail Alley could change in the coming years. In fact, Hail Alley could be moving into new areas and even intensifying. (For example, current Hail Alley regions like Colorado and Kansas could expect more intense hailstorms on the whole.)
On the other hand, data seems to show Hail Alley could expand farther and farther south the warmer temperatures get. This means places like Texas could become a more prominent part of Hail Alley and thus even more hail-prone than they were before.
Statistics agree: Texas is a massive target for Mother Nature and her hailstorms. Texas had the highest number of hail events in 2022 AND in 2020. Texas-based hail claims made up 23% of ALL hail claims in the entire U.S. from the years 2018 to 2020, and the state consistently had more hailstorms than any other state over the years 2012 through 2021.
This is notable considering Texas still doesn’t top the list of states considered the most hail-heavy, but it’s getting there. The bottom line: with rapidly changing weather trends and patterns across the country, hail insurance could quickly become a standard insurance policy to keep agricultural businesses protected from more intense and surprising hail events.
Even if you thought you shouldn’t fear hail and don’t need hail insurance, this could change at the drop of a hat, with trends like these!
Which areas are the most likely to experience hailstorms and hail damage?
What other hotspots should be made more aware of hail and hail insurance coverage, considering these trends?
While only the northern part of Texas is a hail-prone region (albeit a heavy one), entire states like Kansas and Nebraska carry a high risk for hail just about anywhere you live… yes, no matter where you are in the state. In fact, these two states make up the bulk area of Hail Alley, even if they experience less hailstorms on average than north Texas.
Great portions of Iowa and Oklahoma should watch out, too, as they likewise make up a substantial portion of the corridor. That said, climate predictions expect that overall hailstorm frequency in the U.S. will go down, even in Hail Alley… but the intensity of these storms will go up, especially in Texas more than any other state.
Reports are also showing that hailstorm frequency AND intensity are establishing in states and areas outside of Hail Alley. These are the weather patterns that growers around the country should be paying attention to. Even if you’re not in a hail-prone area and never considered hail insurance, with these changing trends… it may be time to!
For example, South Carolina is becoming a more hail-associated state, even though it lies far outside of Hail Alley. Still, it trails only four states behind Texas on the list of states that experienced the most hailstorms between 2012 and 2021. It’s still nowhere close to the most historically hail-heavy region of the U.S.; and yet, it is experiencing substantial damages owed to hailstorms.
Then there is Ohio, which experienced 144 substantial hailstorms between 2012 and 2021 responsible for around $11.1 billion in damages. Ohio row croppers and even orchard growers don’t tend to put hail insurance on the front lines of their coverage — though some Ohio growers have found a hail policy to be life-saving even if they never expected hail to touch their crops. (Especially in a state so far out of Hail Alley)!
The takeaway: statistics, farmer experiences, and even on-the-ground reports from insurance agents (including ours) speak for themselves. If hail hasn’t happened to you yet, even if you live far out of Hail Alley, there’s no telling if that will keep being the case.
The likelihood of significant hail damage taking place just about anywhere is going up. The only thing that will fully prepare you for that eventuality and any possible economic losses to your business… hail insurance!
How much in damages are hailstorms causing?
It goes without saying: there’s a reason hail insurance exists. State Farm Insurance has reported that costs of hail insurance damage (to property), and the insurance claims associated with them, have gone up by $1 billion from 2021 to 2022.
Though there aren’t exact numbers for agricultural claims and amounts specifically, it’s a sign that hail damage is becoming a serious and peaking trend, and it might continue to do so in coming years.
According to the Lincoln Journal Star, Nebraska— a notoriously hail-prone state in the center of Hail Alley — suffered $4.6 billion in natural disaster damage throughout 2022, even higher than weather-related causes in previous years…including the 2019 major flood, 2021 tornado outbreaks, and the 2020 derecho. One major contributor to these damages: hail.
June 2022 brought hail and high winds to Nebraska, along with hailstorms that occurred through April 2022, bringing about severe economic damages to homes and agriculture alike. June 11th alone created 5-inch diameter hail in one part of the state, breaking local records for largest hailstones ever measured in the county!
Together with all these storms reported by the Lincoln Journal Star, hail took part in creating some of the largest monetary losses in the history of Nebraska. Insurance companies state that they haven’t seen anything comparable to these wind- or hail-related damages like this in years before 2022. All in all, hail caused $2 billion in losses associated with insurance claims in Nebraska alone — and those are only the insurance claims that were actually covered, and not speaking for farmers or property owners who were uninsured or under-insured.
Farmers: don’t overlook the importance of hail insurance this spring.
Even if hail doesn’t seem like a peril to your agricultural operation at the moment — or it even if it hasn’t affected your operation, state, or region in years past — keep your eyes on the trends! Experts, farmers, and insurance authorities all sing the same tune: hail is a serious economic threat and could get worse in the coming years.
Hail is getting more intense everywhere, and becoming a more frequent occurrence in places where hail damage is not typical. Even the geographics of Hail Alley may be changing. Not to mention, overall, hail insurance claims for property damage have spiked. No doubt they will spike for agricultural professionals as well.
For farmers who haven’t had concerns about hail damage to their crops, mostly because of where they are located, this highly damaging weather event could become a new norm and a new reality in their region — and you don’t want to be caught unprotected by unprecedented hailstorms, and worse, deal with a serious loss of revenue (or the loss of an entire business and family legacy).
Get in touch with a trusted insurance company and agent for more info about hail insurance. The wonderful thing about these hail insurance policies, many will have you covered for many other types of perils: such as fire, lightning damage, damage during transport, and more!