Forensic weather data is the key to conducting timely, accurate hail claims investigations
In 2023, the U.S. experienced a record number of hailstorms. Several urban hailstorms during 2023 caused more than a billion dollars in losses each.
The severity of losses was in part caused by these storms occurring in densely populated areas where 1-inch or greater hail stones fell on over 10 million properties clustered closely together.
That means that in 2023, insurers saw a lot of hail claims, especially in Texas. But not all claims were the direct result of the storms that policyholders said were the culprits of damage.
According to the Coalition Against Insurance Fraud, fraud occurs in about 10% of property-casualty losses. Hail claims are among the most prevalent examples of home insurance fraud.
Often, hail-related insurance fraud occurs when property owners make a fraudulent claim that hail damage occurred while insured when in fact, the damage occurred prior to them securing insurance.
So, the question then becomes, how can insurers know exactly what damage happened to a property and when?
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Forensic Data: Protecting Insurers Against Insurance Claims Fraud
Hailstorms can happen quickly and in rapid succession, so insurers need access to accurate and timely forensic weather data to support decision-making with confidence. Having ready access to such data allows insurers to create precise, accurate footprints of hailstorms to easily distinguish one storm from another.
While both forensic and forecasting data are both critical to insurance decision-making, forensic data is ideal for damage verification. Forensic data is about confirming exactly what happened while weather forecasting involves looking at historical events and patterns to make predictions about the future.
Weather forecasting data enables insurers to make better underwriting decisions, develop sound strategies for recovery efforts, and prepare policyholders for upcoming weather events. Forecasting data alone, though, is not enough to determine the precise footprint of a hailstorm. Claim verification models that run on forecasting data simply do not offer the differentiation to determine when and where exactly hail damage occurred.
Insurers need forensic data to verify the validity of hail claim coverage because it provides the particulars surrounding dates of loss. It is only through these exacting insights that they can confidently pay out rightful claims.
The Power of Forensic Hail Report Maps for Verification
Both comprehensive forensic data and the technology that analyzes the data are crucial to an insurance carrier’s ability to quickly and efficiently verify hail claims and pay out claims for policyholders with proper coverage in place.
For insurers, that means they must follow a reliable strategy for accurately mapping weather damage, particularly when it comes to hail. This is especially true as the climate continues to evolve.
Many hail verification solutions use algorithms based on forecasting data, which leave too much room for error. Instead, insurers need to look for models like CoreLogic’s Weather Verify™ | Hail, which use a data-driven algorithm that combines radar, public reports, social media, and meteorological expertise to map hailstorms with stones 0.75 inches or larger. By identifying hail stones even smaller than those which the NWS considers large — hail stones that are 1 inch or greater — HVT-generated maps are more likely to include hail with damage-causing potential.
Forensic Data for Future Insurance Carrier Solvency
Hail is no longer a secondary peril. Although insurers have traditionally considered severe convective storms and the hail that comes along with them has high-frequency but low-severity events, hail damage is quickly becoming expensive. Paying out too many of these claims in error can threaten an insurance business’ solvency.
Faced with more frequent and severe hailstorms and the ever-increasing costs of labor and materials, it is now critical for insurance companies to use forensic hail data. With forensic data, insurers can quickly gain the insights necessary to accurately manage hail claims, thereby strengthening organizational resiliency in the face of unpredictable storms, which are more frequently falling outside of what people generally consider “hail season.”
While the peak of hail season — or severe convective storm season — is generally considered to be behind us for 2024, hail will continue to be a significant concern for insurers as going into 2025.
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