Wildfires and Hailstorms Drive $100B in Insured Losses Again in 2025

In 2025, insurance adjusters were challenged not only by catastrophic wildfires but also by a surge in cumulative damage from severe convective storms (SCS). The Los Angeles wildfire became the most expensive on record with $40 billion in insured losses, yet it was outpaced by SCS events like hailstorms and tornadoes, which caused $50 billion in damages nationwide. These ongoing storms are proving more difficult for insurers to model and manage than high-profile single disasters.

For claims professionals, this shift signifies a deeper structural problem in risk distribution. As more homes are built in high-risk areas—such as the wildland-urban interface (WUI)—losses become both more predictable and harder to insure. The situation is compounded by a shrinking reinsurance safety net, as global reinsurers hike prices or pull out of volatile markets, leading to increased pressure on primary insurers and the policyholders they serve.

Adjusters must now navigate more complex claims landscapes, manage policyholder expectations amid premium hikes, and adapt to stricter underwriting requirements. This story is a stark reminder of the mounting pressure on the entire claims process, from initial assessment to payout negotiations, especially in regions like California, Texas, and the Midwest.