As hailstorms roll in, carriers and TPAs must prepare to support motor policyholders 

June 6, 2024

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By Telly Berry, Director of Vendor Management, Nationwide Appraisals, Sedgwick; Chris Bakes, Managing Director, Nationwide Appraisals, Sedgwick

Although likely to commence at a later start than usual, hail season will bring a long, thick duration through September. As severe hail outbreaks occur and motor claims start rolling in, carriers must have all the correct resources to lean on to facilitate a timely, thorough and effective claims process for their policyholders. In this blog, we’ll discuss weather insights and ways that carriers can support motor policyholders during hail season. 

The landscape of hail events in America

Hail is a form of precipitation that occurs when raindrops, in extremely cold areas of the atmosphere, freeze into balls of ice that then fall toward the earth’s surface. It often occurs during severe weather patterns — such as powerful thunderstorms — and causes billions of dollars in damage to vehicles, buildings, crops and possessions each year, particularly in Tornado and Dixie alleys. 

The end of March 2024 capped off the 5th-warmest and 10th-wettest start to a year since the National Oceanic and Atmospheric Administration (NOAA) began its 130-year climate record. Beginning mid-March and lasting through the month’s end, portions of the Midwest already saw an intense severe weather outbreak — and the 2024’s first billion-dollar weather and climate disaster — when powerful storms brought baseball-sized hail and more than 20 tornadoes, resulting in comprehensive damage and loss of life.

Severe weather shows no signs of slowing down. This year remains on track with the overall trend of increasingly frequent hail event occurrences, and the increasingly expensive insurance payouts that follow. NOAA’s annual severe weather report summary recorded nearly 7,000 hail events in 2023 — concentrated mostly in Texas and Nebraska — compared to just over 4,400 in 2022, an approximate 2,600 increase in hail events. 

The role of carriers and TPAs in hail events

As one of the most costly and common severe weather hazards in the United States, carriers must be ready wherever and whenever a hail event occurs. Consider a severe hail event that causes damage to hundreds of automobiles. Depending on the time the hailstorm hits, carriers typically receive a low volume of motor claims in the first couple hours. If it occurs late in the evening or at night, an influx will begin rolling in the following midday, once claimants have had the necessary time and daylight to evaluate the damage to their vehicles. Then, once the claim is filed with their insurance carrier, the policyholder’s waiting game begins. 

When a hail event results in an overwhelming claim volume, carriers will commonly offload a percentage of their caseloads to a third party administrator (TPA). TPAs have a major advantage in ensuring a swift and pointed claims process after a hail event: the ability to plan for and deploy extensive resources to the markets that are in need, cross-country. 

First, a TPA’s primary resources are evaluated; say there are enough internal staff to cover 500 hail claims. Depending on the claim volume, the next step would be evaluating which partners in the catastrophe (CAT) space to engage. Perhaps there’s a need for more facilitators to complete estimates, and one partner of the TPA has sufficient resources to fill the gap, they would be put on notice.

TPAs are familiar with the usual markets that commonly become saturated. They are also familiar with their internal resources, as well as their partner organisations’ resources available for allocation. And on the client-carrier side, there are a broader range of resources at a TPAs disposal compared to a local CAT estimating firm: the full-time motor CAT adjusters, the teams that handle claims involving loss of life, a nationwide network of independent contractors available for deployment, as well as desk staff. 

Given the national footprint and breadth of experience, companies like Sedgwick have the resources to deploy and saturate a market much more effectively than competitors; scores of CAT adjusters are already strategically located in primary hail markets such as Texas and Arkansas, on standby for the next event.

Minimizing cycle times

A carrier has one concern more pressing than all others: time. The TPA engaged by the carrier’s primary focus is controlling and minimizing a claim’s cycle time, while upholding stringent accuracy. Once a claim is filed, the clock starts ticking, and the priority is making initial contact with each policyholder to set up appointments for in-person estimates. Making contact not only puts the claimant at ease and communicates an attentiveness to solve their problem, but also quickens the claim’s cycle time and keeps the client carrier satisfied.

Once first contact has been made and an appointment is on the books, the next priority is completing the hail damage estimate expeditiously. Last year Sedgwick averaged 24 to 36 hours completing estimates, including time spent on quality control processes (QC). 

The importance of empathy

An independent contractor can write 100 estimates per day and work quickly and effectively. But a well-established organisation that upholds a high standard of values and takes training seriously, will not continue to hire that individual if they do not treat customers with empathy. All parts of an individual’s character — whether they’re courteous, their demeanor, whether they dress professionally — holds equal weight.

A policyholder filing an motor CAT claim is likely going through a stressful, uncomfortable time; one where the day-to-day life they’re used to experiencing is upended, in sometimes a moment’s notice. The policyholder has likely been paying their insurance plan’s premium for years, or decades, and when a hail event occurs, this is the moment their premium payments are realized. That policyholder is not only paying for the adjuster to respond quickly and effectively, but they are also paying for a seamless, hassle-free service. 

Well-trained motor adjusters act with empathy and prove — through every action — that each customer is genuinely cared for, not simply a box to be checked. Delivering fast, delivering with empathy, and delivering with accuracy, from start to finish, is the gold standard carriers and policyholders look for, and remains the standard that Sedgwick has long held a reputation for upholding.

Learn more — Read about Sedgwick’s comprehensive CAT appraisal services specific to the automotive space.

Tags: appraisals, motor, motor claims, Carrier, CAT Claim, Cat Insights, CAT response, Catastrophe, Hailstorm, Policy, policyholder, Property, Property claims, Property damage, Restoring property, Third party administration, third party administrator, TPA, United States, Weather, Weathering disasters