Through the roof! Hailstorm claims soar

Through the roof! Hailstorm claims soar

April storm one of state's costliest: $560M in damage

BY TOM SPALDING TOM.SPALDING@INDYSTAR.COM

The Good Friday hailstorm will go down as one of the costliest weather events in state history: 177,000 Central Indiana residents have filed claims totaling $560 million for auto and home repairs.

"For many companies, it is the biggest storm they can recall, in terms of dollars," said Marty Wood, a spokesman for the Insurance Institute of Indiana.

Most auto repairs have been completed or scheduled, officials say. Focus is increasingly turning to residential repairs, as many homeowners decide whether to get roofs and gutters fixed.

Officials report isolated cases of fraud on the part of repair crews and homeowners, including one whom officials suspect climbed on his roof and used a coin to simulate storm damage on his shingles.

But as storms go, most agree it was perfect in one sense -- while it created lots of damage, the storm resulted in relatively little hardship. There were no deaths and relatively minor injuries from the storm, which struck on Good Friday.

"It is a catastrophe, but you want to save the word catastrophe for a hurricane or a storm like that," said Doug Miller, 50, of Coomer Roofing of Indianapolis. On Friday, his crew was sweating out another job nailing shingles onto the pitched roof of a home in the Meridian-Kessler neighborhood. "We're here in a nice neighborhood. There's no one having to camp out on their lawns."

Certainly the storm was good for Miller's company. He said that by the end of June, he had already exceeded revenues for all of 2005.

New roof or no roof

For some homeowners, the decision on whether to get a new roof is a no-brainer. A $500 or $1,000 deductible to get a new $10,000 roof is almost a windfall.

"For a lot of people, it is a gift. It is a blessing in disguise," said Scott Surette, a home inspector from Indianapolis. "It's a 10-, 12-, 15-year-old roof that is OK, but they have a golden opportunity to get a new roof, and the insurance company is footing the bill. . . . They say, 'If they are going to hand me free roof, I'll take it.' "

But some suspect there are homeowners and contractors who are taking advantage of the hailstorm.

"There are a lot of roofs being replaced that don't need to be replaced, in my opinion," said Glenn Barton of Barton Home Inspections of Indianapolis. "I think it happens because the opportunity is there to turn it (a claim) into the insurance company, and people are saying 'Me, too.' "

While it may be tempting to keep up with the Joneses and join the re-roofing frenzy, insurance experts say there is a potential downside. Homeowners who turn in too many claims run the risk of having their policy dropped.

The state's Consumer Protection Division of the attorney general's office says it has received relatively few complaints since the storm, and most of those have dealt with the timeliness of getting insurers to pay for repairs.

"The number of complaints relating to work not getting done, scams by home contractors and those kinds of complaints that we have jurisdiction over, have not been voluminous," said Staci Schneider, spokeswoman for Attorney General Steve Carter.

Jerrell Campbell, a Seattle resident who is in Indianapolis to help State Farm Insurance handle 1,400 claims per week here, said only a few instances of fraud have been found. One Indianapolis homeowner, he said, is suspected of using a coin or some other object to mimic hail damage.

In another case being probed, Campbell said one roofing contractor showed a prospective client pictures of a storm-damaged roof -- only it wasn't the client's roof. Some contractors have misrepresented themselves as State Farm employees and submitted claims purporting to work for the policyholder.

How much longer will the repair frenzy last? The state recommends policyholders move promptly in making their claims.

Bob Skinner, 35, Pike Township, said he will get the roof of his ranch home inspected next week. He waited three months to get it done. Part of his motivation is because, on his street, "everybody else is doing it."

"If it's a problem, I want it taken care of before it becomes a problem," Skinner said. "And before I miss the opportunity to take care of it."

_____________________________________________

Some quick answers

Bettye L. Foy, of the state Department of Insurance, answered some frequently asked questions.

Q: Is there a deadline for people to file claims from the April 14 storm?

A: Refer to your policy (duties after a loss). The insured should report a claim promptly.

Q: Should homeowners expect their rates to go up once they file a claim?

A: As a rule, rates will not go up after filing one claim.

Q: Can an insurance company cancel a policy related to a single hail event after a claim?

A: Generally, an "act of God" is not grounds for cancellation.

_____________________________________________

What homeowners should do

According to Angie's List, a subscriber-based Indianapolis referral company:

If you haven't already done so, inspect your roof, gutters, windows and siding and take photos. Get a damage assessment from your property insurer's adjustor and get at least three estimates from contractors.

Be wary of storm chasers and door-to-door solicitors.

When you pick a contractor, have him or her negotiate directly with your insurer if they disagree on repair costs.

Be prepared to wait until repairs can be made.

Frequently asked questions

Many homeowners are deciding whether to file claims for hail damage. Here is information from Bettye L. Foy, deputy commissioner of the consumer services division in the state Department of Insurance.

Q: How many claims does a homeowner have to file before he or she is in jeopardy of being canceled?

A: As a rule, a policy would not be canceled for one claim unless there is fraud or misrepresentation.

Q: Does money make a difference? Is it better to make a claim for $15,000 or less as opposed to $50,000 or more?

A: No.

Q: Will the state monitor the situation in case rate increases occur?

A: Indiana's property and casualty insurance rate filing laws are designated as "file and use" laws. That means insurers are required to file property and casualty insurance rates with the Department of Insurance but are not required to wait for approval before the rates can be used. The department can, after a hearing, require an insurer to withdraw rates if they are found to be excessive, inadequate or unfairly discriminatory.

-- Tom Spalding

_____________________________________________

By the numbers

177,000

Claims submitted from Central Indiana in connection with the April 14 hailstorm, according to Insurance Services Offices, Ind., a for-profit company in New Jersey that tracks catastrophes.

$560 million

Damages submitted from the storm through July 7, according to Insurance Services.

$38.5 billion

Estimated cost of damage caused by Hurricane Katrina, according to Insurance Services.

Call Star reporter Tom Spalding at (317) 444-2803.