Does Commercial Insurance Cover Hail Damage?

It may not get the same media coverage as hurricanes, but hailstorm damage can cost billions of dollars each year within the U.S.

Even a single hail event can be financially detrimental for communities; one of the costliest hailstorms in the nation occurred in Arizona during 2010 when a severe weather outbreak led to a damage toll of $2.8 million.

Such life-changing costs can have businesses and commercial property owners asking, “Is hail damage covered by insurance?” The full answer could help save your business from finding itself unprepared and financially pummeled by a hailstorm.

IMPACTED BY HAIL? GET HELP NOW!

WHAT IS HAIL AND HOW DOES IT IMPACT COMMERCIAL PROPERTIES?

Hail is a form of icy precipitation that occurs in association with severe storms.

Hailstones form in powerful thunderstorms when strong updrafts carry water droplets into cold areas that freeze the raindrops. The turbulent movement inside the cloud can allow hailstones to collide with additional droplets and grow additional layers, eventually becoming heavy enough to overcome the updraft and fall to the earth as hail.

After the hailstones pick up speed while falling, they can collide with your commercial property. Hail can cost businesses significantly because it can:

Dent roofs
Ruin siding
Break windows
Puncture roofing membranes
Disrupt fasteners
Lead to leaks
Cause mold growth from intruding water

WHAT DOES COMMERCIAL PROPERTY INSURANCE COVER?

It is helpful to first understand the kind of insurance that would cover a commercial hail damage insurance claim for business owners. Commercial insurance, also known as business insurance, is designed to help protect businesses from the financial impacts of unexpected and damaging events.

There are different types of commercial insurance, including general liability, commercial vehicle, workers’ compensation, cyber liability and commercial property insurance.

Commercial property insurance is especially important when looking at the costly burdens of hail damage. Also called business hazard insurance, this protection helps insure properties and assets against damage stemming from certain natural disasters or other perils covered by the policy.

Commercial property insurance, which can cover buildings, equipment and inventory, may be structured as an open perils, or all risk, policy or a named peril policy. An open perils policy names specific exclusions but covers damage for other events. A named peril policy, however, only provides coverage for the explicitly listed types of events and conditions. These distinctions become even more important when identifying if hail is covered under your plan.

SO… IS HAIL DAMAGE COVERED BY COMMERCIAL PROPERTY INSURANCE?

The answer can vary based on many different factors, but typically, yes: commercial property insurance does cover hail damage. To be certain, and to explore the intricacies of your policy’s details, ensure you speak with your insurance agent or broker, as well as your insurance carrier. Always fully review your policy and especially check the “exclusions” section of the policy, to help understand all aspects of coverage for your policy.

If your specific policy does cover hail damage, you likely will still have to reach a deductible. For hail, that deductible may be a percentage of your building’s insured value, and this amount could be around 1% to 5%. Some hail-prone states may even have per-building deductibles you must reach if your business operates multiple structures.

Though the answer may usually be “yes” to the question of “is hail damage covered by insurance,” this isn’t always the case, and certain triggers could limit the extent of the coverage even if it is covered under the property insurance policy.

WHEN IS HAIL DAMAGE NOT COVERED? AND OTHER FACTORS TO CONSIDER

Don’t assume your commercial property insurance covers hail damage in every circumstance. You may need a separate insurance policy or an endorsement to your current policy for hail damage. There are exceptions to consider, including (but not limited to) the following.

HIGH REGIONAL RISK

If you live in areas with high risks of hailstorms, this peril may not be covered in your commercial property insurance. For example, living on the coast or in regions that experience hurricanes may mean insurance providers do not want to provide coverage for the high likelihood of wind and hail damage.

COSMETIC DAMAGE

Some insurance policies may not cover the cost of replacing property with only aesthetic damage. If the structure is still functional and the damage is deemed purely cosmetic, such as unsightly dents on a metal roof, the impacts may not receive coverage.

LATE CLAIM FILING

Certain states and most insurance policies set a specific deadline, called a statute of limitations or reporting period, for when damage must be reported to your insurance carrier(s) after a hail event. Missing that legal deadline could result in a claim for hail damage being denied.

NAMED STORMS

Some policies may have a different deductible for hail damage or a sublimit when it is associated with a named storm, such as a named hurricane. Your policy should outline what conditions would alter the deductible or eliminate hail damage coverage altogether.

CONDITION OF PROPERTY

Although your policy may cover hail damage, certain parts of your property may not receive a full replacement cost if they are older or in poor condition. Work with your insurance agent, broker or carrier to understand if your insurance will only pay to cover the depreciated value of your damaged assets (known as the Actual Cash Value or ACV).

WERE YOU IMPACTED BY HAIL?

Before a hailstorm ever hits, it pays to not only fully understand your policy but also to ensure you have a restoration team in place to facilitate a smooth response for a commercial hail damage insurance claim.

If your commercial property was impacted by hail damage, the teams at Cotton Global Disaster Solutions and Cotton Roofing are prepared to help. Backed by decades of experience, Cotton can help identify the damage, work with your insurance carrier and repair the damage. We specialize in disaster recovery and full roof replacements and repairs, so you can focus on getting back to business as seamlessly as possible.

Whether you’re preparing for the next big storm or needing an evaluation after a hail event, Cotton Roofing offers a free roof inspection. Call our teams today so we can help you stay successful.

REQUEST A FREE ROOF INSPECTION NOW!