April 2016 saw one of the century’s most devastating hailstorms hit San Antonio, Texas, causing insured losses of approximately $5.5 billion — including $560 million in motor vehicle damage. That’s just one example of the kind of damage hail and wind can cause.
Consider a few other hail-related factoids: One of the largest pieces of hail ever recorded in the U.S. had a diameter of more than eight inches and weighed nearly two pounds! Imagine a projectile of that size coming toward your automobile or property at a speed of 100 miles per hour or more.
Hail’s impact on the auto insurance space is particularly relevant for those managing catastrophe (CAT) claims and appraisals, as timely response and efficiency are crucial in mitigating costs and meeting customers’ needs. As we enter the March-to-September peak hail season, the questions facing many insurers, who are also dealing with other record-breaking CAT events, are: What can we expect in 2025, and what can we do to prepare?
The growing challenge of hail damage
Hailstorms have long been a significant driver of insurance claims, and that’s expected to continue this year. According to the Insurance Information Institute, damaging hailstorms have surged in the past few years. Recent data shows some of the largest U.S. carriers are seeing significant increases in payouts, totaling billions of dollars. Contributing to rising costs are:
- Storm frequency and severity
- Storms hitting highlight populated areas (and populations migrating to more storm-prone areas)
- Inflation and increased prices for goods and services
Insurance carriers must prepare for hail season claim spikes, particularly as extreme weather events become more frequent.
Hail and wind damage impact all types of auto insurance policyholders — from individual consumers to entire fleets to manufacturers and dealership inventories. Some of the most expensive claims in recent years have involved auto dealers. In 2024, a single dealership in Oklahoma suffered more than $3.5 million in hail damage to over 170 new cars on their lot.
Beyond the substantial financial impact of hail damage, policyholders often experience frustration and delays when seeking auto repairs. After a major storm, area repair shops can be booked for weeks or even months, making it difficult to secure an appointment. No one wants to drive around in a dented car, and prolonged delays can erode insurance carriers’ customer satisfaction and loyalty.
The initial post-loss interaction between a policyholder and their insurance carrier can be pivotal in setting the tone for the entire claim. A seamless, thoughtful and empathetic approach reassures the claimant, helps control cycle time, and expedites resolution. Once contact is made and an appointment is scheduled, the priority shifts to completing the hail damage estimate quickly and accurately. Our team at Sedgwick averages 24–36 hours to finalize estimates (including thorough quality control (QC) procedures) on behalf of our clients, ensuring efficiency and precision.
Technology and partnerships in hail claims management
What else can carriers do to efficiently manage reserves and adjudicate claims while maintaining customer satisfaction?
Rather than reducing coverage options — which can create challenges for customers and other stakeholders — insurers can leverage technology and strategic partnerships to enhance claims processing and damage assessment. Advances in digital assessment tools, automation and streamlined repair programs provide a path to optimizing efficiency, reducing costs, and improving the customer experience. Effective solutions include:
- Mobile and drive-in inspections: Rapid response is crucial following a major hail event. We support a number of insurer clients in speeding up processes by setting up drive-in assessment sites on their behalf at centralized locations, such as big-box store parking lots or leased warehouses. These drive-in sites, which can be activated when a given region reports 200 or more claims, allow for significantly higher daily assessment volumes than traditional field inspections.
- 3D scanning technology: With 99% accuracy in hail damage detection, advanced 3D scanning (the auto version of MRIs for humans) reduces the risk of human error and expedites claims processing. This technology allows adjusters to focus on complex cases while automated scans handle routine inspections, thereby optimizing resource allocation.
- Paintless dent repair (PDR) programs: PDR techniques provide faster, cost-effective repairs of minor dents without requiring full body shop services. Given that many body shops have months-long backlogs, PDR programs help to expedite repairs and get drivers back on the road sooner.
- Next-generation estimation tools: Advanced estimation software can instantly generate repair assessments based on scan data — reducing reliance on manual appraisals while enhancing speed and accuracy.
Additionally, strong partnerships with repair shops and service providers play a critical role in ensuring timely repairs and minimizing policyholder disruptions. Fast assessment times are essential, but if the policyholder can’t then get to a repair shop, that value is lost. By integrating leading-edge technology and fostering collaboration, insurers can navigate the complexities of hail damage claims while reinforcing customer trust and long-term loyalty.
Hail season preparedness strategies
Many carriers are responding to hail-related losses by revising coverage policies. But in today’s volatile climate, such measures may not be a sustainable long-term strategy. Instead, insurers should consider proactive solutions to mitigate risk while maintaining policyholder protection:
1. Enhancing CAT response infrastructure
As noted, planning for drive-in assessment locations in high-risk areas allows for rapid post-storm evaluations. Insurers should also form meaningful partnerships with third party administrators (TPAs) and technology providers that have specialized hail assessment expertise. Deploying mobile scanning teams and imaging tools further streamlines the process, reducing claim cycle times and expediting settlements.
2. Improving claim processing efficiency
AI-driven damage estimation tools can significantly tighten appraisal times by analyzing images and generating instant repair cost estimates. This automation allows adjusters to focus on complex cases while facilitating rapid resolution of straightforward claims. Insurers can also implement real-time reporting systems that track claim volume, severity and estimated losses. This data-driven approach improves resource allocation and prevents bottlenecks in the claims process. Additionally, integrating mobile appraisal solutions enables remote assessments, reducing delays and enhancing policyholder satisfaction.
3. Bolstering policyholder support
Navigating the claims process can be stressful for policyholders, especially following a catastrophe. Bringing repair services directly to storm-hit regions and offering interim transportation options helps insurers maintain customer mobility and reduce disruption. Transparent communication is also critical. Keeping policyholders informed about their claim status and expected repair timelines fosters trust and reduces frustration, which reinforces loyalty even in challenging situations.
4. Leveraging local expertise
To ensure rapid and efficient claims management, carriers should seek partners that offer local claims experts who can be deployed rapidly when a catastrophe hits. This allows staff claims’ professionals to maintain their focus on other areas of the business while ensuring experts are available on the ground. These regional specialists also understand local repair networks, regulatory considerations, and hail damage patterns, bringing greater efficiency and stability to the resolution and customer service operation.
There are a number of promising solutions in play and on the horizon for managing hail and wind claims for auto, but managing the influx of information during CAT events can still be overwhelming. Dashboards can provide instant insights on large hail events, including the number of claims, their status, stage, and payments made and pending. The benefits are significant, as dashboards allows for real-time monitoring, quicker decision-making and more accurate reserves.
Weathering the storm
Hailstorms will continue to be a major concern for insurers, with 2025 likely bringing new challenges. However, the key to success isn’t in limiting coverages — it’s investing in innovative solutions and strong partnerships.
By embracing advanced technology, strengthening CAT response capabilities, optimizing repair processes, and collaborating with innovative partners, carriers can more efficiently manage hail-related claims. These forward-thinking approaches not only help to reduce cycle times and control costs, but also enhance policyholder satisfaction — ensuring businesses remain competitive in an evolving auto insurance landscape. In an era where extreme weather has become the rule rather than the exception, auto insurers who adopt these approaches will be better prepared to weather the storm and thrive.
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Tags: Auto, Auto claims, auto repairs, automotive, Cat Insights, Catastrophe, catastrophe claims, Damage, Hailstorm, storm damage, storms