Amount, Timing Of Snow Dampen Insurance Claims

Severe weather normally means insurance companies pay out millions of dollars to repair property damage for their customers.

So forgive insurance executives from midstate companies if they held their breath during the January blizzard that dumped more than 30 inches of snow across the region.

Turns out, they could have kept breathing.

Insurance executives were surprised to find they haven't had nearly as many claims as they thought they would, and the claims they have received are not only lower than normal for a weather event, but lower than normal for a typical weekend.

"There was better cooperation by the public and private sector than I had ever seen" during the blizzard, said Scott C. Rogers, president of York County-based The Glatfelter Agency. "The people of the private sector were allowed to work remotely and not come in, and it fell on a weekend, which means people didn't have to try and get into work. I was really impressed."

In a January report, insurance company research firm A.M. Best Co. cited sources estimating the blizzard's damage would be $1 billion or more, but said it was still too early to determine the financial fallout.

While claims could still be coming in to insurers from the storm, the likelihood of a deluge of property damage claims is slim.

"Property claims tend to be shortly after (an event), you'll get an influx of those claims right away," said Colette Fearon, a financial analyst at Oldwick, N.J.-based A.M. Best. "But with the temperatures rising and the snow melting so quickly, I don't anticipate a lot of claims being reported much longer after the storm."

Fearon said insurers she's talked to since the storm are seeing the same trends as those in the midstate: There just haven't been as many claims as feared.

With that in mind, A.M. Best said it doesn't expect the financial fallout to punish insurance companies, and that most insurance carriers "have sufficient capital to effectively absorb the event," according to the report.

That will help control the cost of most product lines to rise only at the rate of the economy and inflation, Fearon said.

Steve Fisher, vice president of sales and marketing at Millers Mutual Group Inc. in Harrisburg, said it's difficult to predict the future direction of premium prices because of the many outside forces - such as rate of inflation, construction costs, legislative changes and weather events - that can impact them.

"The insurance industry insures all kinds of businesses and, therefore, has a vested interest in understanding and responding to any and all changes that will occur in the future," he said.

Michael Harter, a vice president and principal at E.K. McConkey & Co. Inc. in York County, said he wasn't surprised by the lack of claims because in his experience, the bigger the snow totals, the more people stay inside.

The most claims from snowstorms, he said, come when it's 1 or 2 inches.

"That's when you still have people out driving, and you have workers' (compensation) and slipand-fall claims," he said. "Once it gets to over 12 inches, that's when people stay in their homes and hunker down. So once I heard it was going to be over 12, that's when I got comfortable."

After a blizzard, one of the more common claims is for frozen pipes that burst. But because the weather warmed so quickly, the temperatures weren't cold enough for long enough to freeze pipes, said Millers Mutual spokeswoman Katie Gouldner.

Even though the snow melted away, the worry after a major snowstorm always turns to potential flooding, especially considering the flooding that followed the snowstorm of January 1996.

But obtaining flood insurance takes time, Rogers said. There is a 30-day waiting period for anyone looking to obtain flood insurance. And that 30 days doesn't start until a property owner goes through the sometimes costly process of obtaining an elevation certificate, a government document recording the elevation of the property.

The cost to obtain a certificate for a property that doesn't already have one usually is between $500 and $1,500.

Rogers said he hasn't heard of anyone calling his company to request flood insurance.

"It's not something you can buy and immediately have it go into effect," Rogers said. "It's not just as easy as calling up and getting it."

BY MICHAEL SAD0WSKI | [email protected]