Hailstorm Losses Now Rival Hurricane Damage, Threatening Insurers
Event summary
- Cotality's 2026 report finds 43.5 million U.S. properties are at moderate or greater risk from hail, representing $17.84 trillion in reconstruction cost value (RCV).
- Hailstorm frequency increased to 142 days in 2025, up from 122 days in 2024, with over 600,000 homes impacted by hail two inches or larger.
- Hail is now the primary driver of loss in severe convective storm (SCS) events, potentially accounting for 80% ($58 billion) of a 1-in-500 year loss.
- The Texas Triangle region (Dallas-Fort Worth, Houston, Austin, and San Antonio) holds over $2.2 trillion in exposed RCV at risk from hail damage.
The big picture
The shift towards hail as a dominant catastrophe loss driver represents a fundamental change in the U.S. property insurance landscape. Previously considered a secondary peril, hail's increasing frequency and severity, coupled with concentrated property values, are straining insurer capacity and recovery resources. This trend highlights the inadequacy of historical risk models and underscores the need for more sophisticated data-driven approaches to underwriting and disaster preparedness.
What we're watching
- Pricing Pressure
- Insurers will face increasing pressure to re-evaluate pricing models to accurately reflect the escalating risk and frequency of hail events, potentially leading to higher premiums or reduced coverage in high-risk areas.
- Modeling Accuracy
- The ability of modeling firms like Cotality to accurately predict and quantify hail risk will become a critical differentiator, as insurers increasingly rely on granular data to manage exposure and capital allocation.
- Regulatory Response
- State and federal regulators may introduce new requirements for insurers to assess and disclose hail risk, potentially impacting underwriting standards and capital adequacy ratios.
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