Guides
Severe convective storms: hail, tornadoes and rising insured losses
Hail and wind cost U.S. insurers about $51 billion in 2025. Why it is a frequency problem, how carriers set roof and deductible terms, what to do.
Severe convective storms are thunderstorms that produce hail, damaging straight-line winds or tornadoes, and they have become the costliest insured natural peril in North America. Gallagher Re estimated that these storms caused $51 billion of U.S. insured losses in 2025, the third year in a row above $50 billion. For commercial property buyers the effect is concrete: higher wind and hail deductibles, roofs paid at depreciated value, tighter rules on older roofs and, in some places, hail excluded or sublimited.
What counts as a severe convective storm
The National Weather Service defines a severe thunderstorm as one capable of producing hail an inch or larger in diameter or wind gusts over 58 mph (National Weather Service). Insurers group the damage from this family of storms (hail, straight-line wind including derechos, tornadoes and the heavy rain that comes with them) under severe convective storms, or SCS. Hail is the main claim driver: Triple-I, drawing on the Gallagher Re data, says hail accounts for about 80% of SCS claims in a typical year (Digital Insurance, April 27, 2026).
The size of the problem
| Measure | Figure | Source and date |
|---|---|---|
| U.S. SCS insured losses, 2025 | $51 billion | Gallagher Re, January 21, 2026 |
| Global SCS insured losses, 2025 | At least $60 billion, 47% of insured nat cat losses | Gallagher Re, January 21, 2026 |
| Global SCS insured losses, 2023 to 2025 | $208 billion, of which $176 billion (85%) in the U.S. | Gallagher Re, January 21, 2026 |
| SCS insured losses, first half of 2026 | About $26 billion | Gallagher Re, as reported by Artemis |
Gallagher Re's H1 2026 report, as summarized by Artemis, put total global insured natural catastrophe losses at $46 billion, 28% below the 10-year average, and said SCS "remains the costliest insurance peril in North America," accounting for around $26 billion of that total. The 2025 figures come from Reinsurance News's coverage of the Gallagher Re report, which concluded the peril has become a primary annual loss driver for the industry.
Why are the losses rising? Triple-I's chief insurance officer was quoted as saying the main factor is not necessarily stronger storms but more homes, higher-value construction and rising rebuilding costs in storm-prone areas. More roofs under the same storms, each costing more to replace, produces more loss with the same weather. The same logic applies to commercial buildings, rooftop equipment and solar installations.
Why reinsurers and carriers treat it differently from hurricanes
A hurricane is one big event that hits the insurer's catastrophe reinsurance layer. An SCS season is dozens of mid-sized events, each too small to reach the attachment point of a per-occurrence cat treaty, which means the insurer keeps most of the loss on its own balance sheet. That is why SCS used to be called a secondary peril and why the label no longer fits; see secondary perils: the storms, floods and fires that are not hurricanes.
Carriers have responded in three ways:
- Reinsurance. Insurers buy aggregate covers and lower-attaching layers, and reinsurers price them from catastrophe models: how insurers price hurricanes, quakes and fires that is less mature for hail than for hurricane. See treaty vs facultative reinsurance: how insurers share risk.
- Underwriting. Roof age, roof material and location now decide whether a building is written and on what terms.
- Policy terms. Percentage deductibles, roof valuation endorsements and exclusions shift part of the loss back to the insured.
What policy terms to look for
| Term | What it does |
|---|---|
| Wind/hail percentage deductible | A percentage of the insured value of the damaged property, similar to a named storm deductible. ISO's CP 03 21 is the standard version; see named storm deductibles: how percentage wind deductibles work |
| Roof surfacing limitation | ISO CP 10 36 lets a carrier value roof surfacing at actual cash value and exclude cosmetic hail damage. Insurance Journal reported on September 7, 2026 that the cosmetic exclusion is not approved in every state |
| Roof age schedule | Payment on a depreciation schedule tied to the roof's age and material |
| Wind/hail exclusion or sublimit | Some carriers exclude hail on older roofs, in some ZIP codes or beyond a sublimit; surplus lines forms differ |
| Matching | Whether the carrier pays to replace undamaged slopes or materials to match |
| Contents and rooftop equipment | HVAC condensers and solar panels may be separate items with their own limits |
Forms vary by carrier. Read the wind/hail endorsements and the valuation clause together; see replacement cost vs actual cash value for business property for how the two valuation bases differ.
Worked example (hypothetical)
Say a distributor owns a warehouse insured for $5 million. Replacing the roof would cost $400,000. A hailstorm damages the whole roof, which is 15 years old with a 20-year expected life. Compare two policies.
| Policy 1 | Policy 2 | |
|---|---|---|
| Wind/hail deductible | 1% = $50,000 | 2% = $100,000 |
| Roof valuation | Replacement cost | Actual cash value on straight-line depreciation |
| Loss measure | $400,000 | $100,000 (five of 20 years remaining is 25% of $400,000) |
| Payment | $350,000 | $0 |
Policy 2 pays nothing, and the owner funds a $400,000 roof. The numbers are illustrative: depreciation methods vary by carrier and some states limit what can be depreciated. The lesson is that the roof valuation clause, the roof age and the deductible interact. Two policies that look similar on the declarations page can produce very different outcomes after a storm.
Claims issues specific to hail
- Date of loss. Many roofs are hit more than once. The date of loss determines which policy year, which deductible and which carrier pays. Keep dated weather reports and photos.
- Repair versus replace. Carriers often pay for a repair when the damage is limited; engineers' reports, test squares and brittleness testing can drive the answer.
- Storm-chasing contractors. Contractors arriving after a hailstorm may offer to "handle the claim." Do not sign an assignment of benefits or a contract before you understand it. A public adjuster is licensed and regulated in most states; a roofer's claim help is not the same thing.
- Disputes. Valuation disagreements can go to the the appraisal clause in commercial property disputes; coverage disagreements cannot. See the commercial property claim process, step by step.
- Texas. Texas Insurance Code chapter 542A requires a claimant to give written notice at least 61 days before suing over many property damage claims (Tex. Ins. Code 542A.003). Rules for hail claims differ by state, so ask an attorney or your state regulator; see Texas and Colorado.
Before the next renewal
- Document the roof: age, material, last inspection and any repairs. Photos with dates are better than recollection.
- Ask your broker for the wind/hail deductible, the roof valuation basis and any roof age conditions in writing.
- If the roof is near the end of its life, replacing it before renewal can change terms more than negotiating after a claim.
- Ask about credits for impact-resistant roofing; Class 4 roofs under the UL 2218 test are often cited, but credits vary by carrier and state. See mitigation credits and resilient construction for commercial property.
- Protect rooftop equipment and secure inventory and vehicles; hail damage to cars in a parking lot falls under comprehensive coverage on the auto policy, not the building policy.
- For hurricane-exposed locations, check how the wind/hail and named storm deductibles interact; see hurricane season and commercial property insurance: what to do before a storm.
Key takeaways
- Severe convective storms caused an estimated $51 billion of U.S. insured losses in 2025, per Gallagher Re, and about $26 billion globally in the first half of 2026.
- Hail drives most claims, and the losses come from many mid-sized events that insurers retain, not from one catastrophe.
- Carriers respond with percentage wind/hail deductibles, roof valuation at actual cash value and roof age rules, so the roof is the underwriting variable that matters.
- Read the roof valuation endorsement and the deductible together before renewal and before a storm.
- Rules for hail claims differ by state; ask your broker, an attorney or the state regulator before signing or suing.