Severe convective storms, including hail, tornadoes, and straight-line winds, are now a primary driver of insured losses, according to Cotality’s 2026 Severe Convective Storm Risk Report. The report highlights how recovery outcomes depend on coordination across underwriting, modeling, claims, and restoration functions.

A fictional scenario illustrates the challenge. Two homeowners experienced hail damage, but delays in claims response allowed additional rain to cause mold and significantly increase total loss costs. This example reflects broader issues tied to response timing and resource availability.

A Multi-Stage Recovery Process

Cotality describes storm recovery as a coordinated effort across several roles:

• Underwriters use structure-level data for risk selection and pricing.
• Catastrophe modelers identify high-risk concentrations.
• Claims representatives verify events and initiate recovery.
• Restoration contractors complete repairs and reconstruction.

Each stage contributes to the speed of property restoration.

Underwriting and Exposure Trends

The report states that historical weather data alone is no longer sufficient. Insurers are incorporating forward-looking data, including building characteristics such as roof age and condition.

Hail remains a major driver of claims. Older roofs are more susceptible to damage, which can increase claim severity. Cotality estimates that more than 43.5 million U.S. properties fall into moderate or greater hail risk categories, representing $17.8 trillion in reconstruction cost value.

Texas leads in exposure with nearly 8 million properties and $3.1 trillion in risk. Illinois ranks second with $1.5 trillion. At the metro level, the Chicago area has the highest exposure at $1.0 trillion, referred to as the "Chicago Anomaly."

Catastrophe Risk and Hail Losses

The report identifies a shift in how severe convective storms are categorized. Previously considered secondary perils, these events now cause losses comparable to those from major hurricanes.

At a 500-year return period, modeled losses reach $71 billion, with a single hailstorm accounting for $58 billion. Even at more frequent intervals, hail events can generate nearly $30 billion in insured losses.

A June 2023 Texas storm cluster caused $7 billion to $10 billion in losses, with 95 percent attributed to hail. A shift of 15 to 20 miles into a denser area would have increased losses to approximately $30 billion.

Claims and Weather Verification

Claims response timing remains a key factor in recovery. Fast, accurate weather verification enables earlier resource deployment.

In 2025, hail measuring 2 inches or greater impacted more than 600,000 properties, representing $177 billion in reconstruction cost value. Texas recorded more than 235,000 impacted homes. Wyoming, Oklahoma, Wisconsin, and Kansas also reported high volumes, accounting for about 66 percent of affected properties.

Cotality recorded 142 days of damaging hail in 2025, exceeding the 20-year average of 122 days.

Restoration and Project Complexity

Restoration workflows are becoming more complex. Contractors manage multiple services, including emergency stabilization, water mitigation, contents restoration, and reconstruction.

Exterior damage to roofing, siding, and windows is common. In some cases, full structural rebuilding is required. Contractors are also expanding into appraisal and consulting roles to support cost estimation and documentation.

Storm-related water intrusion increases interior damage risk, often requiring mitigation work before claims are finalized. Large-scale events can also extend project timelines due to labor and supply constraints.

Global Activity

The report notes similar patterns internationally. In Europe, Germany recorded 12.3 billion EUR in losses from 2000 to 2024, while Ireland had the highest per capita losses.

A July 2023 storm system in southeastern Europe produced high winds, large hail, and flooding across multiple countries, causing structural damage and infrastructure disruption. The event placed simultaneous strain on multiple recovery systems.

Cotality’s report presents severe convective storm recovery as a coordinated process that relies on accurate data and alignment across industry functions.

Homeowners across the U.S. may face another year of rising insurance costs. A recent forecast from Insurify projects that home insurance premiums will increase by an average of 4% by the end of 2026, marking the fifth consecutive year of rate increases.

While the national average may seem moderate, some regions are expected to experience significantly higher jumps, driven largely by ongoing weather-related risks and rising claims costs.

What’s Driving Higher Home Insurance Costs?

The continued rise in premiums is closely tied to the growing frequency and severity of natural disasters.

Severe convective storms — including tornadoes, hail, and high winds — have caused widespread damage across the Midwest and Great Plains. In 2025 alone, these events resulted in more than $52 billion in insured losses, making it one of the costliest years on record.

Wildfires are also playing a major role, particularly on the West Coast. In Southern California, wildfires caused more than $250 billion in damages in 2025, further impacting insurers’ risk models and pricing strategies.

As these events become more common and more expensive, insurance companies are adjusting how they manage risk. This can lead to higher premiums, changes in coverage terms, or reduced availability in certain high-risk areas.

States Expected to See the Largest Increases

Although premiums are rising nationwide, some states are projected to see more significant increases in 2026:

• California: +16%
• Nebraska: +13%
• New Mexico: +11%
• Georgia: +10%

These projected increases follow sharp rate hikes in 2025 in states like Minnesota, Colorado, and Iowa, highlighting an ongoing trend in areas with elevated weather-related risks.

The Broader Impact on Homeowners

Rising insurance costs can influence more than just monthly expenses. Research from Florida State University suggests that a 10% increase in homeowners insurance premiums may lead to a 4.6% decrease in housing prices.

As affordability becomes a growing concern, insurance costs are increasingly part of the overall conversation around buying and owning a home.

The Most Expensive States for Home Insurance

Some states continue to stand out for their high insurance costs, often due to increased exposure to hurricanes, severe storms, or other natural disasters. According to projections for 2026, the most expensive states include:

• Florida: $8,458
• Oklahoma: $5,205
• Louisiana: $5,035
• Nebraska: $4,560
• Texas: $4,529
• Colorado: $4,164
• Alabama: $3,979
• Mississippi: $3,833
• Minnesota: $3,654
• Illinois: $3,559

Florida remains the most expensive by a wide margin, reflecting its ongoing exposure to hurricanes and coastal risks.

Where Rates May Decrease

Not all states are expected to see increases. Some areas may experience slight declines — up to 2% — by the end of 2026. These include:

• Hawaii
• Massachusetts
• Maine
• Louisiana
• Rhode Island

While these decreases are relatively small, they may provide some relief compared to the broader national trend.

What This Means Moving Forward

The steady rise in home insurance costs reflects larger changes in weather patterns, rebuilding expenses, and overall risk exposure. As insurers continue to adjust pricing and coverage strategies, homeowners may need to stay informed and regularly review their policies.

Understanding regional risks and how they impact insurance costs can help individuals make more informed decisions about coverage, property investments, and long-term planning.