Guides
Secondary perils: the storms, floods and fires that are not hurricanes
Secondary perils (hail, tornado, wildfire, flood, freeze) drove 92% of 2025 global insured catastrophe losses. What they are and how they change policy terms.
Secondary perils are the weather and fire events that insurers once treated as small, local and frequent: hail, tornadoes and straight-line winds (severe convective storms), wildfire, flood, freeze and drought. They are called secondary because catastrophe models and reinsurance programs were built around the "primary" perils, hurricanes and earthquakes. In 2025 secondary perils accounted for a record 92% of global insured natural catastrophe losses, according to the Swiss Re Institute's sigma 1/2026 report, which put total insured losses at about $107 billion.
That shift explains much of what business owners see at renewal: percentage hail deductibles, roof-age rules, wildfire non-renewals, and flood sublimits. These are not hurricane-driven.
Primary versus secondary
| Primary perils | Secondary perils | |
|---|---|---|
| Examples | Hurricane, major earthquake, European windstorm | Severe convective storm (hail, tornado, wind), wildfire, flood, freeze, drought |
| Event size | Rare, large, geographically broad | Frequent, smaller, often scattered across many properties |
| How models treat them | Mature, vendor-validated | Younger models, wider error bars |
| Typical reinsurance treatment | Catastrophe excess of loss, high limits | Aggregate and lower layers, attritional losses |
| Where it hurts | Coastal states, fault zones | Midwest, Plains, West, any inland flood plain |
"Secondary" refers to modeling maturity and the size of single events. It does not mean minor losses. Swiss Re counted about $51 billion of global insured losses from severe convective storms in 2025, the third-costliest year on record for the peril after 2023 and 2024, and about $40 billion from the January 2025 Los Angeles wildfires, the largest insured wildfire loss in the sigma records. For North America, Swiss Re estimated that severe convective storms and wildfire together made up 96% of insured natural catastrophe losses in 2025 (reported by Insurance Business). No major hurricane made U.S. landfall in 2025, which Swiss Re characterized as favorable variability rather than lower underlying risk.
Swiss Re also puts the long-term growth in insured natural catastrophe losses at roughly 5% to 7% a year, driven by more property in harm's way, higher construction costs and changing hazard patterns. See climate change and the commercial insurance market.
Why insurers struggle to price them
Several features make secondary perils harder than a hurricane:
- Frequency adds up. A single hailstorm may cost an insurer $50 million. Thirty of them in a season cost more than a hurricane, and a cat model that focuses on rare large events can understate the total.
- Hazard moves. Wildfire spreads with fuel, wind and dryness that change year to year. Hail footprints shift with the climate of the storm season.
- Vulnerability is local. A roof's age, material and slope decide hail damage. A building's defensible space decides whether it survives a fire. Models need data insurers often do not collect.
- Claims inflation. Roofing, labor and materials costs, and litigation over hail claims, push loss costs up faster than premium.
- Reinsurers pay attention. Reinsurers raised attachment points after 2023 so that they pay less of the frequent storm losses, which left primary insurers holding more. See what is reinsurance, and why it affects your business premium and The January 1 reinsurance renewals explained: the 2026 results.
What changes in your policy
Insurers respond to secondary perils through terms more than headline rate. What to look for:
- Percentage wind and hail deductibles. In many Plains and Midwest states, a carrier applies a deductible of 1% to 5% of the building value to wind or hail. On a $4 million building a 2% deductible is $80,000. This differs from the flat deductible on fire. Read it against named storm deductibles: how percentage wind deductibles work, which cover coastal wind.
- Roof schedules. Roof surfacing payment schedules or actual cash value on roofs over a set age. Replacement cost may apply only for a newer roof.
- Cosmetic damage exclusions. Endorsements that exclude dents and discoloration on metal roofs and siding when function is not affected.
- Wildfire changes. Non-renewal in mapped wildfire zones, higher wildfire deductibles, or sublimits, plus mitigation requirements. See wildfire and commercial property insurance: cover, cost and mitigation and FAIR Plans and residual markets for commercial property.
- Flood sublimits. The standard ISO commercial property causes of loss forms exclude flood. Where flood is added, it often carries an annual aggregate sublimit and special flood zone deductibles. See Commercial flood insurance: NFIP limits and private options.
- Freeze and water. Protective safeguards endorsements (for example the ISO CP 04 11 protective safeguards form, which includes a requirement to restore a failed system within 48 hours) and freezing exclusions apply when a building is unheated. The Hartford reported on December 9, 2025 that water and freezing made up about 22% of its small business claims, averaging $34,600. Check the policy for heat-maintenance conditions.
Forms differ by carrier and state, so read your own wording. The ISO forms are the baseline, and manuscript and carrier forms vary.
A hypothetical: the hail renewal
Say a Colorado distributor owns a 60,000-square-foot warehouse with a 14-year-old membrane roof. The building is insured for $9 million. At renewal the carrier raises the rate only 4% but changes the wind and hail deductible from $25,000 to 2% of the building value ($180,000), adds a roof surfacing schedule that pays the roof at 50% of replacement cost after year 15, and excludes cosmetic damage to the metal siding. The premium looks flat. The retained risk rose substantially. The owner's options: self-insure the deductible and hold reserves, buy a deductible buy-back or a DIC layer, replace the roof, or price an alternative with a higher flat deductible. A broker should model each against likely hail frequency in that county.
What a business can do
- Know your deductible in dollars. Convert every percentage deductible into a number and compare it with cash on hand.
- Track roof age and type. Keep records of installation, inspections and any upgrade to impact-resistant material.
- Create defensible space and ember resistance if you are in a wildfire area. Ask your carrier for its mitigation checklist.
- Map flood exposure beyond the FEMA map. Heavy-rain flooding occurs outside mapped zones. Get an elevation certificate or an engineer's review.
- Maintain heat and drainage in unoccupied buildings, and fix leaks before winter.
- Ask for mitigation credit. Some states require discounts for qualifying improvements. See mitigation credits and resilient construction for commercial property.
- Plan operations. Business income after a storm depends on supplier and utility access; see contingent business interruption insurance and supply chain risk.
Key takeaways
- Secondary perils such as hail, wildfire, flood and freeze made up a record 92% of global insured catastrophe losses in 2025 (Swiss Re sigma 1/2026).
- They are hard to model because they are frequent, local and driven by property details like roof age.
- Insurers respond with percentage deductibles, roof schedules, cosmetic exclusions and wildfire and flood limits rather than only rate increases.
- Convert deductibles to dollars, document building condition, and use mitigation to improve terms.