Hail has now become a leading driver of insured losses, with modern storms now able to cause financial losses comparable to a Category 4 hurricane, a recently published Cotality report has revealed.
For insurers and reinsurers, this shift demands a move away from historical data averages toward property-specific modelling.
Ultimately, the entire recovery ecosystem, including the insurance industry, must adopt coordinated, data-driven strategies to guarantee a swift and resilient rebuilding process for affected communities, Cotality states.
Historically, severe convective storms (SCS) were labelled “secondary perils,” which are high-frequency but low-severity events. However, the data shows this is no longer the case, according to Cotality’s 2026 Severe Convective Storm Risk Report.
The report identified more than 43.5 million US properties at moderate or greater risk from damaging hail. These properties represent roughly $17.84 trillion in reconstruction cost value (RCV).
In 2025, the US recorded 142 days with damaging hail – seven more than in 2024 and significantly higher than the 20-year average of 122 days.
During those events, hailstones two inches or larger struck more than 600,000 homes, representing roughly $177 billion in RCV.
Jon Schneyer, Cotality’s Director of Research and Content, said: “Hail doesn’t command the same headlines as hurricanes, floods or wildfires, but the data shows it has become one of the most financially destructive natural hazards facing the property market.”
“Once considered ‘secondary’ with relatively modest losses, this ‘death-by-a-thousand-papercuts’ peril is now one of the biggest drivers of property insurance claims. That shift is placing growing pressure on insurers and recovery teams in what has become a high-stakes relay to restore damaged communities.”
According to Cotality’s modelling, across the spectrum, from the rarer 1-in-500 year to the more frequent 1-in-50 year SCS event, hail is the primary driver of loss.
At the more extreme 1-in-500 year loss, hail alone could generate roughly 80%, or $58 billion, of the estimated $71 billion in all SCS perils (including tornadoes, straight-line winds, and hail) insured losses.
Even less extreme events, like a severe hailstorm expected every few decades, can cause nearly $30 billion in insured losses – comparable to a major hurricane, Cotality highlighted.
Texas remains the highest-risk state due to its size, geography, and rapid urban development. In 2025 alone, over 235,000 Texan homes experienced damaging hail, far exceeding any other state.
Risk remains specifically concentrated in the Texas Triangle – Dallas–Fort Worth, Houston, Austin, and San Antonio – which together account for more than $2.2 trillion in exposed RCV with moderate or greater hail damage risk.
The report also stated that tornadoes and straight-line winds constitute a significant and distinct layer of risk across the United States.
According to Cotality estimates, over 76 million homes face a moderate or greater risk from tornadoes, which translates to a potential reconstruction cost value (RCV) exceeding $27 trillion.
Furthermore, an additional 64 million homes are vulnerable to damaging winds of 65 mph or stronger, representing an RCV of more than $23 trillion.
The report concludes that traditional underwriting – that relies heavily on historical hazard data or averaged regional estimates – is no longer enough, as it leaves portfolios exposed to unaccounted risk factors.
These factors, often caused by the structures on the ground, can significantly amplify or reduce claims.
“As expanded urbanization development puts more, larger, and more costly to repair, property in harm’s way, storm losses are growing in both scale and complexity,” Schneyer explained.
Adding: “For insurers and reinsurers, accurately capturing not just the volatility but also the aggregated magnitude of these events is critical. When underwriters are able to accurately price knowing the unique vulnerabilities of each individual property and modelers can map extreme risks with confidence, capital and resources are secured before a storm strikes. After an event, precise weather verification can confirm whether the damage being claimed was from the most recent storm.
“The industry needs coordinated, data-driven insights across the entire recovery ecosystem to ensure communities can rebuild quickly and resiliently.”
The escalating financial toll of localised storm events is not unique to North America; Cotality’s analysis highlights similar trends in Europe.
Changing weather patterns and greater urban development are driving up the economic consequences of storms across the continent. Between 2000 and 2024, Germany recorded the highest total economic losses from SCS among EU members, reaching €12.3 billion.
However, when considering the size of the population, Ireland experienced the most significant per capita loss rate.
