NPR's Planet Money had a good discussion: http://www.npr.org/sections/money/2014/10/03/353030214/bedbu...
(Actually, hail claims have been going up: http://www.claimsjournal.com/news/national/2014/05/02/248354... )
Of course they can cover. It's a matter of how much you pay for your insurance, and to a large degree how much they company saves up. In the case of a hailstorm it's not because they cannot pay, it's because they don't have proper savings to cover it. A hailstorm with fist size hails is not going to cover the entirety of California, so it's very manageable.
An example, when a fireworks factory in Denmark exploded the total claim of material damage was 750 million DKK (113 million USD). The vast majority was covered by insurance companies, even though that would fall under correlated risks. One of the way insurance companies handle this is to have a joint fund with other insurance companies (I think this is government mandated), where they can withdraw in cases like this.
Also, it's not safe to drive during a massive hailstorm. You should be pulled over anyway.
Car insurance is different from other forms of insurance. The reason car insurance is mandatory is because otherwise, if you hit someone or damage their property with your car and they successfully sue you, they could very well end up with nothing (if you're broke). With insurance, that person is guaranteed to get a payout, because the insurance company is well-capitalized enough to be certain to pay out.
In a world in which everyone drives, this is mathematically equivalent to everyone purchasing insurance against damage that happens to them or their car by someone else. The reason it's not structured this way is because (1) not everyone drives a car, and (2) it creates a moral hazard problem (having car insurance - and the consequences to taking actions which can raise your premiums - serve as a deterrent to bad driving.)
I'm still trying to figure out how the wind pushes over an open trailer with 2 sports cars on it. At least mine was 4 or 5 years old at the time, the other car on there was brand new and had only been driven far enough to get it on and off the trailer.
I'd always, perhaps naively, assumed an "act of god" was simply covered.
That's twisted logic. There was a loss of perhaps somewhat more than $5k all things considered, but you didn't have to replace a $5k blue-book-value car with a $25k car. That $25k may have been a big outlay if you paid cash, but it's not a loss for that amount. So far, you've only lost $25k-(current bluebook value), which is much less than $25k (as long as the car hasn't been damaged) even if the car was new and dropped a thousand or two the moment you bought it.
This, but minus the value of the car you now have.
To bring this back to topic, I would gladly get on board with any plan to fix "insurance". It really feels like less insurance and more government mandated protection money ; but that seems to be the fundamental problem, that reforming insurance is almost paramount to reforming finance. How do you even begin to make headway against an entity with that much power/influence and tentacles already so deep in these processes?
(edit re: protection money; the gist of it is anger that if you fall on a "responsible/lucky" part of the bell curve, you'll likely end up paying out for FAR more than you ever get back while simultaneously watching the insurance company often do everything in their power to NOT come through when they should. In my case, I would have expected the transportation company's mandatory liability insurance to cover this.)