LexisNexis: Insurance Claims Severity Reaches Record High; Frequency Declines
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U.S. insurers face increasing pressure as they contend with rising damage severity, rising inflation-driven replacement costs and a reshaping of loss patterns, a new report from LexisNexis Risk Solutions finds.
The 2026 LexisNexis U.S. Home Insurance Trends Report analyzed claims trends in the U.S. home insurance industry to help carriers make more informed, strategic decisions. It found that All-Peril severity reached a record high last year, increasing 25.9% from 2024 and 93.2% compared to 2019. While All-Peril loss cost decreased 4.4% and frequency decreased 23.8% from 2024 to 2025, loss cost remained the third-highest in seven years and 50.0% higher than in 2019.
“The U.S. experienced 23 climate disasters with $1 billion or more in damages in 2025, totaling $115 billion in damages and marking the third highest year of billion-dollar climate events on record,” the report said. “The Los Angeles wildfires accounted for more than half of that total at $61.2 billion, demonstrating how a single catastrophic event can significantly affect loss trends.”
LexisNexis called Fire and Lightning the defining perils of 2025, with loss cost increasing 76.8% and severity rising 67.3% year over year, driven largely by the January 2025 Los Angeles wildfires.
Wind and Hail Perils
Wind loss cost decreased 50.4% and severity decreased 12.0% from 2024 to 2025, while frequency decreased 43.9%, LexisNexis reported.
“The year-over-year decreases were likely driven by the lower number of catastrophe Wind claims in 2025,” the report said. “Despite lower Wind loss costs overall, wind-related risk remained significant. A central tornado outbreak in mid-March was the second costliest billion-dollar weather event of the year, costing an estimated $11 billion.”
Hail loss cost decreased 38.4% in 2025 from its seven-year high in 2023, and frequency decreased 35.4% from 2023. Severity remained flat compared to 2024.
Non-Weather-Related Perils
Non-Weather-Related Water loss cost decreased 6.4% and frequency decreased 7.8% from 2024 to 2025, while severity rose 2.5%.
“Severity for the peril increased 63.16% between 2019 and 2025, likely due to inflation and rising material and labor costs associated with remediating water damage,” the report said.
Liability loss cost decreased 4.0% and frequency decreased 14.6% from 2024 to 2025, while severity increased 12.8% year over year. The report notes this may be anecdotal evidence of social inflation, a term that describes how liability claims costs are increasing above general economic inflation, related to increasing litigation costs.
George Hosfield, vice president and general manager, home insurance with LexisNexis Risk Solutions, noted these broad loss trends are important, “but they are only the starting point,” he added. “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.”
