A recently released Cotality report shows that hail is now a major driver of insured losses, with modern storms causing economic damage comparable to Category 4 hurricanes.
For insurers and reinsurers, this shift requires moving from historical data averages to property-specific modeling.
Ultimately, the entire recovery ecosystem, including the insurance industry, must adopt a coordinated, data-driven strategy to guarantee a rapid and resilient rebuilding process for affected communities, Cotality said.
Historically, severe convective storms (SCS) have been labeled “secondary hazards,” which are high-frequency but low-severity events. However, according to Cotality’s 2026 Severe Convective Storm Risk Report, data shows this is no longer the case.
The report states that more than 43.5 million properties in the United States are at moderate or higher risk of hail damage. The reconstruction cost value (RCV) of these properties is approximately $17.84 trillion.
In 2025, the number of days with damaging hail in the United States will be 142, an increase of 7 days from 2024 and significantly higher than the 20-year average of 122 days.
During these events, hail two inches or larger struck more than 600,000 homes, equivalent to approximately $177 billion in RCV.
“Hail doesn’t grab headlines like hurricanes, floods or wildfires, but data shows it has become one of the most economically damaging natural disasters facing the housing market,” said Jon Schneyer, director of research and content at Cotality.
“Once considered a ‘minor’ risk with relatively small losses, this ‘thousand-death’ hazard is now one of the largest drivers of property insurance claims. This shift has placed increasing pressure on insurers and recovery teams in what has become a high-stakes relay to restore damaged communities.”
According to Cotality’s model, hail is a major contributor to losses ranging from rare once-in-500-year events to the more frequent once-in-50-year events in the South China Sea.
In the more extreme 1-in-500-year scenario, insured losses for all hazards in the South China Sea (including tornadoes, straight-line winds and hail) are estimated at US$71 billion, with hail alone likely responsible for approximately 80%, or US$58 billion.
Cotality highlights that even less extreme events, such as severe hailstorms that occur every few decades, can cause insured losses of nearly $30 billion, comparable to major hurricanes.
Texas remains the most at-risk state due to its size, location and rapid urban growth. In 2025 alone, more than 235,000 homes in Texas were hit by damaging hail, far more than any other state.
Risk remains particularly concentrated in the Texas Triangle region—Dallas-Fort Worth, Houston, Austin, and San Antonio—which have a combined exposure RCV of more than $2.2 trillion and have moderate or higher risk of hail damage.
The report also noted that tornadoes and straight-line winds pose a significant and unique layer of risk across the United States.
Cotality estimates that more than 76 million households are at moderate or greater risk from tornadoes, representing a potential reconstruction cost value (RCV) of more than $27 trillion.
Additionally, 64 million households are vulnerable to damaging winds of 65 mph or greater, equivalent to an RCV of more than $23 trillion.
The report concludes that traditional underwriting, which relies heavily on historical hazard data or average area estimates, is no longer sufficient because it exposes portfolios to unaccounted for risk factors.
These factors are often caused by ground structures and can significantly amplify or reduce claims.
“Storm losses are increasing in size and complexity as urban growth expands and more, larger, and more expensive-to-repair properties are damaged,” Schnell explained.
Adding: “It is critical for both insurers and reinsurers to accurately capture both the volatility and the overall scale of these events. When underwriters can price accurately, understanding the unique vulnerabilities of each property, and modelers can map extreme risks with confidence, capital and resources can be protected before a storm strikes. After an event, precise weather verification can confirm whether the claimed losses were from a recent storm.
“The industry needs coordinated, data-driven insights across the entire restoration ecosystem to ensure communities can rebuild quickly and resiliently.”
Escalating economic losses from localized storm events are not unique to North America. Cotality’s analysis highlights similar trends in Europe.
Changing weather patterns and greater urban development are exacerbating the economic consequences of storms across the continent. Between 2000 and 2024, Germany caused the highest total economic losses in the South China Sea among EU member states, reaching 12.3 billion euros.
However, considering the size of the population, Ireland has the highest loss rate per capita.
The post-hail economic damage now rivals a Category 4 hurricane: Cotality appeared first on ReinsuranceNe.ws.
