The biggest weather risk for homeowners? It's no longer hurricanes.

The biggest weather risk for homeowners is no longer hurricanes. According to new research from climate risk modeling firm First Street, tornadoes, hail, and powerful winds linked to climate change now pose a greater threat to homeowners than floods, hurricanes, and other extreme weather events. In 2025, insurance payouts from "severe convective storms" (SCS) exceeded those from cyclones, marking them as the costliest insured natural disasters globally. This shift reflects a growing concern among insurance companies, property owners, and policymakers as the frequency and intensity of these storms increase. Severe convective storms, defined as short-duration but high-impact weather events, have generated substantial financial losses over the past 25 years. Insurance payouts triggered by these storms totaled $794 billion, surpassing combined losses from flooding, earthquakes, and droughts. First Street’s analysis, based on data from risk management consulting firm Aon, highlights the increasing economic burden of SCS. These events account for one-third of global natural disaster economic losses, with insured and uninsured losses totaling $82 billion in 2025. Of this amount, $68 billion was concentrated in the United States, underscoring the nation's vulnerability to such weather patterns. In the U.S., the prevalence of insured residential, commercial, and industrial properties makes the country especially susceptible to financial losses from damaging wind, hail, and tornadoes. First Street’s chief economist, Jeremy Porter, noted that the combination of valuable real estate and rising storm activity explains the surge in insurance claims. Homeowners' insurance typically covers SCS-related damages, meaning most Americans with mortgages are financially protected against these risks. However, as these storms become more frequent due to climate change, insurance premiums are climbing, placing additional strain on households and businesses. Insurance costs are rising more sharply in certain regions of the U.S., particularly in the Midwest and northern Texas, where severe storms are becoming more common. These areas experience a higher frequency of SCS, leading to increased claims and higher premium rates. While private insurance companies have not withdrawn from these markets, they have raised rates significantly, reflecting the growing financial impact of these events. Illinois and Ohio stand out as particularly vulnerable states, owing to their large urban centers and dense real estate markets. Porter described these regions as lying within a "severe convective storm belt," emphasizing their heightened risk. Similarly, North Carolina and Georgia face threats due to the concentration of valuable properties in cities like Atlanta and Charlotte. Severe convective storms encompass a range of weather phenomena, including thunderstorms, tornadoes, and heavy hail. Unlike hurricanes or earthquakes, which cause damage in limited geographic areas, SCS generate recurring losses through frequent outbreaks of hail, wind, and tornadoes. Hail, in particular, is the primary driver of insurance payouts related to SCS. When large hailstones strike an area, they can inflict extensive damage on homes, vehicles, and infrastructure. Porter explained that such storms tend to affect a wide range of assets, often leaving communities scrambling to recover from the financial fallout. Looking ahead, First Street projects that SCS will become the world's third-costliest natural disaster in terms of lost economic growth within the next decade. These losses stem from disruptions to transportation, commerce, and productivity, as frequent storm activity forces businesses to close and reduces consumer spending. Porter emphasized that the trend of increasing frequency, exposure, and damages from SCS is likely to continue, requiring proactive measures to mitigate future impacts. As the climate continues to evolve, the challenge of managing the financial and physical consequences of severe convective storms will grow ever more pressing.