LexisNexis Risk Solutions, a provider of data, analytics and technology services for the insurance, financial services, healthcare and public sectors, has published its 2026 US Home Trends Report, outlining the latest developments in the US home insurance market.
The report analyses claims data across a range of property perils, examining changes in loss costs, claims frequency and severity, while also reviewing seasonal patterns, catastrophe losses and state-by-state trends to support insurers’ underwriting and risk assessment strategies.
According to LexisNexis Risk Solutions, overall claims severity reached its highest recorded level in 2025, rising by 25.9% compared with the previous year and by 93.2% since 2019.
Although combined loss costs across all perils fell by 4.4% between 2024 and 2025, and claims frequency declined by 23.8%, the company said loss costs remained the third highest recorded over the past seven years and were still 50% above 2019 levels.
The company also highlighted the impact of major weather-related events on the insurance market. The report notes that the United States experienced 23 climate disasters causing at least USD $1 billion in damage during 2025, with total damages estimated at USD $115 billion. Of that figure, the Los Angeles wildfires accounted for approximately USD $61.2 billion, illustrating the significant effect a single catastrophic event can have on annual claims performance.
The report identifies Fire and Lightning as the most costly property perils during 2025. LexisNexis found that loss costs for these claims increased by 76.8% year on year, while severity rose by 67.3%, largely reflecting the financial impact of the Los Angeles wildfires in January 2025.
“US home insurers continue to face increasing pressure and uncertainty as they contend with a ‘perfect storm’ of rising severity, rising inflation-driven replacement costs and a reshaping of loss patterns in the face of shifting climate-driven catastrophes,” commented George Hosfield, Vice President and General Manager, Home Insurance, LexisNexis Risk Solutions.
“The data reinforces the need for insurers to turn to multi-source datasets and analytics to help assess risk more accurately, benchmark performance and adapt to these volatile market conditions.”
The company stated that the longer-term trend across the market continues to point towards higher claims costs despite recent reductions in frequency. While overall loss costs eased during 2025, the company reported that claims severity reached a seven-year high, offsetting the ongoing decline in claim volumes that has been evident since the COVID-19 pandemic.
Looking at individual perils, the report found that Fire and Lightning claims frequency increased by 6% during 2025. LexisNexis attributed much of this increase to the Palisades and Eaton wildfires, estimating that the two events generated losses of USD $61.2 billion, making them the largest climate-related disaster in the US during 2025 and the costliest wildfire event recorded in the country’s history.
For wind-related claims, LexisNexis reported a marked reduction across all key measures. Wind loss costs declined by 50.4% compared with 2024, claims frequency fell by 43.9% and severity decreased by 12%. The company suggested these reductions were likely linked to a lower number of catastrophic wind events during the year.
However, it noted that wind continued to present a significant exposure, citing the mid-March tornado outbreak, which caused an estimated USD $11 billion in losses and ranked as the second most expensive billion-dollar weather event of 2025.
The report also found that hail-related loss costs fell by 38.4% from the seven-year peak recorded in 2023, while claims frequency declined by 35.4%. Claims severity associated with hail remained broadly unchanged from 2024.
Among non-weather-related claims, LexisNexis reported that water damage losses decreased by 6.4% between 2024 and 2025, with claims frequency falling by 7.8%. However, claims severity increased by 2.5%, with the company suggesting that inflation, together with rising labour and material costs, has contributed to a 63.16% increase in severity since 2019.
Liability claims followed a similar pattern, with LexisNexis recording a 4% reduction in loss costs and a 14.6% fall in claims frequency. Despite this, severity increased by 12.8% year on year. The company said the figures may indicate the effects of social inflation, where liability claims rise more quickly than general inflation because of increasing legal and litigation costs.
Hosfield added: “Broader loss trends are important, but they are only the starting point. The real opportunity for carriers is using those trends to help better understand what to look for at the individual-property level. If wildfire risk is expanding into new areas, carriers having insight into the fortification and condition of specific homes can help support more informed assessment decisions.
“If a state is seeing distinct water-loss patterns, understanding the interior risk characteristics of the properties they insure can be key. By connecting national, state and peril-level trends with more granular property intelligence, carriers can make more informed underwriting, pricing and portfolio decisions.”
