Devastating storms in Billings area have increased number of insurance claims, and rates
And, that starts with deductibles.
During the past four years insurance companies have changed how they calculate deductibles, and the shift can be jarring for homeowners if they haven't been paying close attention.
"The 2014 and 2016 storms were major events," said
The amount of damage the storms caused and the economic impact of the thousands of claims filed by homeowners forced insurance companies to change how they approach the business.
The 2014 hailstorm was the first big hit this decade, with wind speeds that topped 59 mph across the
The last time
After the 2014 storm, roughly 3,000
The 2016 storm struck in late May with wind gusts up to 66 mph and pounded parts of
After the 2014 storm, a few insurance companies experimented with implementing a percentage-based deductible for wind and hail damage -- something companies started back east following a series of catastrophic hurricanes in the early 2010s. The practice was relatively unknown in the Rocky Mountain West, Bidlake said.
Percentage-based deductibles require homeowners to pay out of pocket for repairs that equal a percentage of the coverage they have on their home, Bidlake said. Usually it's between 1 and 2 percent.
For example, if a homeowner has
The rub comes when the homeowner's coverage changes. Each year, most insurance companies will increase the coverage on a policy, based on inflation. If a homeowner has been moved to a percentage-based deductible, that yearly increase in coverage means the deductible rises each year as well.
The practice became widespread in
"The 2016 storm was such a major storm, carriers decided they had to look at it," Bidlake said.
As a result, when homeowners make a claim after a storm like the one that hit parts of
"The client needs to be aware," Bidlake said. "They don't always know what their deductible is doing. It's really important for homeowners to contact their agents and find out."
The amount of damage done and the number of claims filed made it hard on these companies to operate at a profit, Kelim said.
"
As a result, the departure of some insurance companies drives up the rates offered by those left operating here.
Insurance claims follow the homeowner; they don't stay with the house, she said. And too many claims can result in the insurance company dropping the homeowner, which was what happened after the 2014 storms.
"You don't always need to rush out and file a claim," Dundas said.
If there's major damage, that's different, she said. But if a homeowner sees some shingles that seem out of place or a few pock marks in the siding, get an expert opinion before taking action, she said.
Bidlake agreed.
"It's a good idea to contact a contractor," he said.
Asking an insurance adjuster to take a look first is also a good idea, he said.
Having a professional look over the property first can give the homeowner an idea of how bad the damage is and how much it will cost to fix it. If the total comes in under the homeowner's deductible, it's probably worth it not to file a claim.
That's one more reason for homeowners to be aware how much their deductibles are, Bidlake said.
Big storms often attract out-of-state contractors, another area in which homeowners should exercise caution, Dundas said.
"Be careful who you give your business to," she said.
It's easier to check on reputations, work history and compliance with state contractor requirements if the company is local. It's also easier to work through a dispute or a complaint with a company if they're based locally.
"You've just got to be really careful," Dundas said.
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