A recently released report by the state’s Department of Insurance shows more claims and higher average claim costs resulting from the severe and prolonged winter storm that enveloped Texas in mid-February than previously reported .
In the report released on September 1, the Texas Department of Insurance detailed data on property and casualty claims from winter storm Uri, which blanketed the state in sub-freezing temperatures, ice and snowfall from February 11 to 19, 2021.
The report contains data on claims submitted by insurers as of March 31, 2021, i.e. 48 days after the start of the event and 40 days after the end of the event. Data was provided by Insurance Services Office Inc., TDI’s statistical agent.
Reporting insurers have made 456,531 insurance claims as of March 31 and said they expected a final payment of $ 8.2 billion in insured losses in Texas from winter storm Uri. Most claims relate to damage to residential properties.
An earlier report released in April showed that 341,679 claims had been filed by the end of March and that the average residential property loss incurred was $ 6,594. The most recent report shows an average loss incurred of approximately $ 11,500 for residential property policies.
TDI noted in the report that the number of claims and losses could continue to increase.
“The losses paid can be expected to increase dramatically in future reports. In addition, subsequent data may show an increase in reported claims and losses incurred, ”TDI said in its report, Insured Losses Resulting from the Texas Winter Weather Event of February 2021.
The winter storm kept most of Texas in sub-zero temperatures, covered in ice, sleet and snow, and suffering from prolonged power outages.
“The prolonged freezing temperatures and accompanying power outages resulted in property damage from frozen pipes; fallen tree branches; the weight of ice, sleet and snow; and other related causes, ”TDI said.
Data in the September 1 report covers property insurance, auto insurance and all other lines of insurance. It includes information from both licensed insurers and qualifying excess line insurers who wrote over $ 5 million in written premiums in Texas in 2019.
The majority of claims reported as of March 31 – 81.5% – resulted from damage to residential properties. Commercial property claims represent 8.6% of claims; 3.9% concerned personal automobile bodily injury; and 5.8% concerned all other types of insurance.
“Commercial auto and flood insurance claims made up a very small percentage of total claims (
The insurers reporting the data used in the report represent approximately 94% of the property insurance market in Texas, 95% of the auto insurance market in Texas, and 86% of the market for all other lines of insurance.
The $ 8.2 billion is made up of $ 2.27 billion in payments to policyholders, $ 3.19 billion in unpaid losses on individual claims (claims reserves) and $ 2.74 billion in reserves actuarially determined for incurred but unreported losses (IBNR).
Insurers predict that about $ 2.67 billion of the $ 8.2 billion (33%) will be covered by reinsurance.
As of March 31, approximately 31% of claims were open, 37% were closed with payment to the policyholder, and 32% were closed without payment to the policyholder. The percentage of open claims differs between residential property and commercial property.
The average loss incurred was approximately $ 11,500 for home insurance policies, approximately $ 74,900 for commercial insurance policies, approximately $ 3,800 for automobile insurance policies and approximately $ 4,700 for all others. TDI predicts that the averages will change as data matures and insurers further investigate and adjust claims.
TDI’s current report does not include data for three companies which account for 8% of the auto insurance market, as well as “a small percentage of the property market (
The table below shows the claims by type of insurance and by claim status. Data is as of March 31, 2021 (40 days after the end of the event).
|Insurance line||Complaints reported||Closed with payment||Closed without payment||Opening percentage||Average days until closing||Total losses paid (in millions)||Total losses suffered by cases (in millions)|
|Residential property – RCV policies||324,523||38.0%||32.9%||29.1%||16.0||$ 1,568.8||$ 2,527.0|
|Residential property – ACV policies||47,603||27.0%||47.3%||25.7%||14.6||$ 162.7||$ 268.3|
|Commercial property (except business interruption)||34,011||15.4%||15.3%||69.2%||0.0||$ 423.3||$ 2,212.4|
|Work interruption||5 448||18.7%||10.9%||70.4%||0.0||$ 41.4||$ 309.5|
|Personal auto bodily injury||17,778||45.8%||25.1%||29.1%||0.0||$ 39.2||$ 48.4|
|Physical damage to commercial automobiles||643||30.3%||26.7%||42.9%||0.0||$ 2.3||$ 4.6|
|Flood insurance||23||0.0%||87.0%||13.0%||0.0||$ –||$ 0.0|
|All other branches of insurance||26,502||65.0%||26.2%||8.8%||0.0||$ 34.7||$ 91.0|
|Total||456,531||36.8%||32.1%||31.1%||15.9||$ 2,272.3||$ 5,461.2|
The following table compares the February 2021 winter storm in Texas to Hurricane Harvey. Harvey data used is as of September 30, 2017 (28 days).
|Key statistic||Winter weather event in Texas as of 03/31/2021
|Hurricane Harvey as of 09/30/2017
(28 days) 2
|Estimated ultimate loss||$ 8.202 billion||$ 15,683 B3|
|Estimated ultimate net loss||$ 5.532 billion||$ 7.253 B3|
|Losses paid||$ 2.722 billion||$ 4.487 billion|
|Losses incurred||$ 5.461 billion||$ 11.536 billion|
|Percentage closed with payment||36.8%||27.5%|
|Percentage of closure without payment||32.1%||28.2%|
|Average claims incurred – Residential property||$ 11,507||$ 7,649|
|Average incurred claims – Commercial property||$ 74,943||$ 94,061|
|Avg. Deadline for closing a claim (residential only)||15.9||16.8|
The report released in April 2021 showed that insurers had paid out $ 1,673.9 billion at the end of March on 186,982 combined claims for residential property, commercial property and auto insurance. The previous report also showed that the bulk of the claims reported (341,679) and paid (169,434) at the end of March were for residential property. The average residential property loss reported at the time was $ 6,594.
The April report showed 24,788 reported commercial real estate claims, of which 8,035 had been paid. The average loss of business property incurred was $ 49,712. Auto insurance claims reported, both personal and business, totaled 19,641, of which 9,513 had been paid. According to the TDI report, 18,860 personal auto claims were reported and 781 commercial auto claims. The average loss for a personal automobile was $ 2,942 and the average for commercial automobile claims was $ 7,302.
Texas calls for a windstorm