Hailstorm Alley, also known as Hail Alley, is an area of Alberta that unofficially runs from High River, which is just south of Calgary, and extends north to central Alberta.
Hailstorms in Alberta have everything to do with geography. Being on the edge of the Rocky Mountains is part of the problem. Mountains and elevation are the perfect combination to create hail. This mix creates air full of moisture at a lower level and very cold and dry currents above coming from the peaks.
According to Environment Canada, hailstones can grow to the size of a grapefruit and hit the ground at 130 kilometres per hour, like a blast from the sky. A hailstorm can severely damage crops, homes, businesses and vehicles. It can also injure people and animals.
In August, the record-breaking hailstorm that hit the Calgary area resulted in nearly $2.8 billion in insured losses, according to initial estimates from Catastrophe Indices and Quantification Inc. (CatIQ). This hailstorm was the second-costliest loss event in Canada’s history, the costliest being the 2016 Fort McMurray wildfire, and the costliest hailstorm in Canadian history. Damage from the August storm more than doubled the prior record from a hailstorm that impacted a similar area in 2020.
Alberta has experienced at least one major hailstorm every year for the last two decades. These storms, which can include damage from wind and flooding, have resulted in more than $10 billion in insured losses, when adjusted for inflation. The past five years have been particularly costly, with these events resulting in $5.5 billion in damages – this amount accounts for more than 50% of all insured losses from summer storms in this region over the past 20 years.
Hail is commonly covered under standard homeowner’s, tenant’s and business insurance policies. Over the last decade or so, hail coverage for homes, particularly in Western Canada, has shifted. Some of the changes include:
A hail-specific deductible: This is typically higher than the usual home insurance deductible. It is more common after a consumer has filed multiple claims for hail damage.
Roof and siding limitation endorsement: This endorsement limits the claims settlements for roof and siding damage to actual cash value only, not replacement cost. Replacement cost value is the amount it will take to replace your property or belongings without any deduction for depreciation. Actual cash value is the replacement cost value, minus depreciation.
Resilient material enhancement endorsement: This coverage pays the increased cost to repair or replace with more resilient materials, for example hail-resistant roofing and siding, after a hail damage claim.
Discount for a new roof or certain type of roof. Some insurers offer this discount if you have a newer roof or specific type of roof.
Insurers set premiums based on risk. The frequency and cost of hailstorms can impact how companies price insurance products. It is critical that homeowners speak with their insurance provider to understand what perils are covered under their policy and additional options available. Depending on your policy, specific types of damage may be excluded. Also, policy deductibles may vary depending on the cause of damage. Insurers can also identify common sources of damage that you should watch for and may be able to direct you to educational resources on how to reduce hail damage.
The best defence against future hailstorms for home and business owners to consider is adaptation measures that protect their property and build more resilience.
After the 2020 hailstorm in Calgary, the city worked with the Institute for Catastrophic Loss Reduction (ICLR) on a $3.25 million incentive program that provided up to $3,000 to homeowners wishing to install a Class 4 impact-resistant roof shingles.
ICLR’s managing director Glenn McGillivray said research shows that installing impact-resistant roofing can reduce damage from hail by up to 15 times and, in high-risk hail zones, it pays for itself eight times over. ICLR has also published recommendations for how to protect homes, businesses and vehicles from hail.
Unfortunately, the City of Calgary ended the incentive program in 2022. Insurance Bureau of Canada believes that given current trends, it’s critical that governments reinvest in programs that increase the resilience of homes and businesses to future hail events. After the 2020 hailstorm, ICLR created HailSmart, a website with information on actions that people can take before, during and after a major hailstorm to help prevent or reduce damage and address any damage caused by the storm.
For their part, insurance companies continue to fund the Alberta Severe Weather Management Society’s weather modification system, known as the Alberta Hail Suppression Project. The project operates 24 hours a day, seven days a week from June 1 to September 15. Specially modified planes fly into storms and spray non-toxic silver iodide to help reduce the severity of hailstorms, which reduces the damage that hailstorms cause to property. This cloud seeding does not prevent all hail from falling. It simply reduces the size of hail and, therefore, the overall severity of the damage.
Since this year’s August hailstorm in the Calgary area, Alberta’s insurers have been on the ground assisting customers with needed repairs and financial support, and working to process over 130,000 claims from the storm. Repairs and rebuilding will take time, and home, auto and business insurers will continue to be there to support affected communities every step of the way.
