What You Need to Know
• In 2025, insurance payouts from severe convective storms surpassed those from cyclones, becoming the costliest insured disasters globally.
• Global insurance payouts from severe convective storms totaled $794 billion over the past 25 years, exceeding losses from flooding and earthquakes.
• In the U.S., severe convective storms caused $68 billion in losses, accounting for one-third of global natural disaster economic losses in 2025.
In 2025, First Street chief economist Jeremy Porter reported that insurance payouts from severe convective storms (SCS) exceeded those from cyclones, marking them as the most expensive insured natural disasters worldwide. The total global insurance payouts related to SCS over the past 25 years reached $794 billion, surpassing the combined losses from flooding, earthquakes, and droughts. In the United States, SCS accounted for $68 billion in losses, representing one-third of the total economic losses from natural disasters that year. This trend highlights the increasing risk posed by tornadoes, hail, and powerful winds, particularly in regions with valuable real estate, such as Illinois and Ohio, which lie along a severe convective storm belt.
Why It Matters
The findings from First Street underscore the growing financial impact of severe convective storms on homeowners and insurance markets. As these storms become more frequent due to climate change, homeowners may face rising insurance premiums, particularly in vulnerable regions like the Midwest and northern Texas. The significant concentration of insured properties in the U.S. amplifies the financial repercussions of these storms, making them a critical concern for both homeowners and insurance companies. Understanding these trends is essential for assessing future risks and preparing for potential economic impacts.
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