Summer hail has long been part of life in western Canada, but a 2024 hailstorm topped them all.
The Insurance Bureau of Canada reports that the hailstorm that hit Calgary in August caused nearly $2.8 billion in insured losses, making it the second most expensive weather-related catastrophe (CAT) in Canada’s history. Only the 2016 Fort McMurray wildfire resulted in more insured losses.
While claims for this year’s hailstorm CAT are still being processed, we’re revisiting a Calgary auto dealer’s massive loss after a 2023 storm to offer a window into what CAT claims processing looks like for Aviva’s commercial customers.
The CAT event
With seven full-service dealerships, the Wood Automotive Group is one of Alberta’s largest vehicle retailers. On June 30, 2023, a particularly vicious thunderstorm in the Calgary region dumped a river of rain and golf-ball sized hail very quickly.
Despite the usual precautions, seven locations of the Wood Automotive Group were hit hard: 670 vehicles were badly damaged.
The appraisals process
Alison Brulotte, an Aviva claims leader in the National Appraisals Western region, coordinated the appraisals for the 670 damaged vehicles.
“We commit to having boots on the ground on location within 48 hours of the notification of loss, so we had people at all seven stores within two days,” she said.
“The dealership had inspected each vehicle and reported damages. We brought in professional appraisers to verify, and our Quality Assurance team audited the process.”
When the information was ready for all affected vehicles, Brulotte shared them with the Aviva claims. Once they had the big picture of the entire claim, they were able to base an advance on the estimates.
“It probably took a good two to three weeks to get the estimates completed and the spreadsheets prepared. It’s not a quick process because we have to be very thorough,” said Brulotte.
The advance payment
Within 35 days of the reported loss, Aviva issued a $600,000 advance payment to Wood Automotive Group.
“It was important to us that we got money out the door as quickly as possible so that if they wanted to replace vehicles, they could start that process,” said Mark Sousa, an Aviva GCS claims leader who coordinated the claims efforts.
“There are always bottlenecks in the claims process and this one involved the manual ownership confirmations. We wanted to come to a number that we felt comfortable issuing while dealing with the more tedious parts of the claim. And we didn’t want to make the customer jump through hoops to get what they needed to move forward.”
The claims process
Managing the claims process for a CAT requires many hands on deck and this one was no exception. With seven dealerships needing attention, three adjusters were assigned to work together to handle claims so the vehicle retailer would get a seamless experience.
However, with seven different locations and hundreds of vehicles to be appraised and verified, this was no easy task for the claims team.
“One of the biggest challenges was confirming ownerships for all 670 affected vehicles,” said Sousa.
Sousa and the dealership’s Director of Finance, Rob Parry, shared a master spreadsheet that included fields for identifying information such as each vehicle’s make, model and VIN and the damage incurred from the storm. The three assigned adjusters and members of Aviva’s auto team worked their way through all the vehicles over the course of several weeks.
“We had to manually go through the ownership of every vehicle, confirm their location—some of them were listed under one dealership but were physically located at another—and match VINs and reported damage. It was a big job,” said Sousa.
As the team shared each vehicle’s details with him, Sousa coordinated everyone’s results on a central spreadsheet and served as the point of contact for Wood Automotive Group.
“Usually, adjusters manage claims on their own, but I wanted to bring more organization to this one for the benefit of the customer. Even though there were five or six people involved, we took care to make it one consistent claims experience for them.”
The settlement
Within 140 days of the reported loss, the settlement was confirmed: $1,902,000 for total damage. After the deductible, the dealership received $1,552,170.31 including the advance payment of $600,000.
“The customer was satisfied. They had a few questions on policy interpretation and claims settled in prior years and we worked with them and the broker to get everything where they felt they were treated fairly. It was a seamless settlement,” said Sousa.
Since the Wood Automotive Group has its own body shop, they determined that it would be better to ask for a settlement rather than have each vehicle repaired.
“In cases like this, dealerships don’t always fix damaged vehicles. Some can be sold as is in a ‘Hail Sale.’ Hail damage is nothing new for dealerships in this area. Many are hit more than once a season,” said Brulotte.
“The Wood Automotive Group has its own body shop so they would have their own technicians and preferred vendors for paintless dent repair. It’s easier for them to go through their own shop.”
The synopsis
When it comes to CATs, it’s all about coordination. Sousa says his team’s goal is to make the claims process as efficient and as painless as possible for customers. For the Wood Automotive Group hail claim, that meant collaborating within Aviva before presenting a cohesive package of information to the customer.
“We worked to make sure they had one point of contact, one deductible, one spreadsheet and one advance payment instead of one for each dealership. There was no confusion about the method of settlement or timelines. Everything happened in lockstep.
The timeline
- June 30, 2023: Severe thunderstorm dumped rain and hail in Calgary.
- July 17, 2023: Wood Automotive Group filed a claim for 670 damaged vehicles.
- July 17-date, 2023: The Aviva claims team verified ownerships and appraised damages for 670 vehicles.
- August 16, 2023: Aviva issues a $600,000 advance payment.
- December 4, 2023: Aviva issues a final settlement of $1,552,170.31.
Want more information about reducing CAT risks?
Aviva Risk Management Solutions has professional risk consultants across Canada who can provide expert advice and resources. Reach out to us at arms.canada@aviva.com
