U.S. Home Insurance Claim Severity Hits Record High in 2025

The 2026 LexisNexis U.S. Home Trends Report shows that all‑peril claim severity reached its highest level in seven years during 2025, rising 25.9% from the previous year and 93.2% since 2019. Despite this surge, overall loss cost fell 4.4% and claim frequency dropped 23.8% compared with 2024.

Fire and lightning were the defining perils of 2025, driven largely by the January Los Angeles wildfires that alone generated more than $61 billion in damages, making California the state with the greatest loss cost. Other high‑cost states included Wyoming and Missouri, affected by wind and hail events, while a central‑U.S. tornado outbreak in March ranked as the second costliest billion‑dollar event of the year. The report also notes the absence of hurricanes on the continental U.S. during the 2025 Atlantic season.

Insurers face heightened severity and inflation‑driven replacement costs, prompting a need to reassess risk models as climate‑related catastrophes reshape loss patterns.