Policy Studies Tort Reform

Come hail or high water: Texas’ litigation explosion

Texas is known for its extreme weather. From hurricanes along the coast to wildfires in Bastrop, the state has absorbed more than its share of weather-related property damage. Yet when it comes to property damage, the most costly culprit is one we typically don’t think about: hail

Between 1999 and 2011, homeowners’ insurers paid $10.4 billion for hail-related losses, more than any other peril. From 2010 to 2012, Texas generated more than 320,000 hail insurance claims, more than double any other state. Hail insurance claims have increased 84 percent since 2010.

That trend appears likely to continue. An April 2014 storm in Denton is expected to result in $500 million in losses, while June storm in Abilene may result in another $400 million.

Texans have the highest insurance premiums in the country, 50 percent higher than the national average. Hail claims are the most significant single contributor to those costs. Insurance losses from hail claims in Texas exceed those from hurricanes and tornadoes combined.

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