LexisNexis U.S. Home Trends Report Highlights Impact of Severe Storms as Catastrophic Claims Climb to Record Levels
2024 LexisNexis Home Trends Report highlights why home insurance has increased for homeowners as loss costs across all perils rise for the fifth year in a row
Key Takeaways
- All Peril lost cost and frequency increased by 4.1% and 11%, respectively, from 2022 to 2023 and 52% and 16.9%, respectively, since 2019.
- While severity has declined 6.3% since 2022, it remains 29.8% higher than 2019 figures.
- Catastrophe claims represented 46% of claims across all perils combined in 2023, the highest in seven years.
- Hail loss cost increased 57.9% since 2022, along with frequency (up 53.6%) and severity rising 2.8% year over year from 2022. States with the highest impact of hail-related perils include
Colorado ,Nebraska andWyoming . - Lost cost for other weather-related perils declined across Fire and Lightning (down 11.1%) and Weather-Related Water (down 51.4%) from 2022-2023. Non-Weather-Related Water loss cost decreased by 11.2% in the same period but remained on an upward trend over the past seven years.
"In the last year, the
All Peril Trends
- The
U.S. home insurance industry has experienced an upward trend in loss cost across all perils combined over the past seven years. These figures include all perils highlighted below: hail; wind, water, fire and lightning; and non-weather related claims such as water leaks, thefts or liability. - Despite the severity reduction in 2023 (6.3% down from 2022), severity's elevation above 2019 (up 29.8%) points to the importance of long-term trend data when evaluating risk and pricing.
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Colorado ranks highest in loss cost from catastrophic claims (274% above 2023 U.S. average catastrophic loss cost), while the severity of claims (dollars lost, on average, per claim paid) inHawaii was well above any otherU.S. state in 2023 (63% above 2023 U.S. average severity). -
U.S. states with the highest combined catastrophe and non-catastrophe loss costs include Colo., Minn., Neb., La. andIowa . Lowest ranking states include Mass., N.H.,W. Va ., Vt. andMaine .
A Year of Hail
- In 2023, the
U.S. experienced 6,962 hail events, up 57.3% from 2022, with 71% of hail claims deemed catastrophic. - With 28 weather and climate disasters in 2023, each surpassing the billion-dollar damage threshold, 17 were attributed to severe weather or hail events.
- Hail peril seasonality over the past seven years continues, with April, May and June observing the highest frequency and loss cost in 2023.
Wind, Water, Fire and Lightening Perils
- Wind peril frequency rose 14.8%, along with a loss cost increasing 0.7% from 2022-2023. Severity, by comparison, fell 12.3% year-over-year. Despite seasonal loss cost averages peaking in August and September over the past seven years, 2023 loss cost and frequency were highest in March.
- In 2023, 62% of Wind claims were deemed catastrophic claims, up from 52% the year prior.
- Fire and Lightning perils in 2023 saw decreases across loss cost (-11.1%), frequency (-8.6%) and severity (-2.7%) from 2022. However, catastrophic claims rose 7% from 2023, with the wildfire on the island of
Maui, Hawaii , being one of the most damaging and deadly events in 2023. - Weather-Related Water perils declined in 2023 with a reduction in loss cost (-51.4%), frequency (-25.5%) and severity (-34.8%). In 2023, 61% of weather-related water claims were catastrophic.
Non-Weather-Related Perils
- Addressing claims related to water damage, such as leaking pipes and appliances, Non-Weather-Related Water perils decreased across loss cost (-11.2%), frequency (-10.3%) and severity (-1.1%) in 2023.
- While Theft loss cost and frequency decreased by 14.2% and 15.8%, respectively, in 2023, severity rose by 1.9%, partially attributed to the rising cost of consumer goods such as high-end kitchenware.
- Despite the marginal increase in severity (0.2%), Liability peril decreased regarding loss cost (down 18.2%) along with frequency (-18.3%) in 2023.
- Other perils, including physical damage claims not included elsewhere, extended coverage, damage to property of others, etc., saw a frequency increase of 9.3% year-over-year. Loss cost, along with severity, both declined 10.7% and 18.3%, respectively, from 2022 to 2023.
"When we look at peril data over a seven-year span, it's increasingly clear that home insurers cannot rely on short-term trends alone to make fully informed decisions about their books of business and operational strategies," said
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