U.S. Home Insurance Claims Severity Hits Record High Amid Climate Disasters
Event summary
- All Peril severity reached an all-time high in 2025, increasing 25.9% from 2024 and 93.2% compared to 2019.
- The U.S. experienced 23 climate disasters with $1 billion or more in damages in 2025, totaling $115 billion in damages.
- Fire and Lightning perils saw loss cost increase 76.8% and severity rise 67.3% year over year from 2024, driven by the January 2025 Los Angeles wildfires.
- Wind loss cost decreased 50.4% and severity decreased 12.0% from 2024 to 2025, while frequency decreased 43.9%.
- Non-Weather-Related Water loss cost decreased 6.4% and frequency decreased 7.8% from 2024 to 2025, while severity rose 2.5%.
The big picture
The 2026 LexisNexis U.S. Home Insurance Trends Report highlights the increasing pressure on home insurers due to a combination of rising severity, inflation-driven replacement costs, and shifting climate-driven catastrophes. The data underscores the need for insurers to leverage advanced analytics and granular property intelligence to make more informed underwriting, pricing, and portfolio decisions in an increasingly volatile market.
What we're watching
- Climate Risk Expansion
- How the expansion of wildfire risk into new areas will affect underwriting and pricing decisions.
- Inflation Impact
- Whether rising inflation-driven replacement costs will continue to drive up claims severity.
- Data Analytics Adoption
- The pace at which insurers adopt multi-source datasets and analytics to assess risk more accurately.
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