Tornadoes, Hail Top Disaster Payouts

Severe convective storms (SCS) are now the leading cause of insured natural disaster losses worldwide, surpassing floods and hurricanes. By 2025, insurance payouts from these intense, short-duration weather events, characterized by tornadoes, hail, and high winds, exceeded those from cyclones. Over the past 25 years, global insurance payouts from SCS have reached $794 billion, a figure greater than combined losses from flooding, earthquakes, and drought.

The United States is particularly exposed, accounting for a significant portion of global losses. In 2025, SCS represented one-third of global economic losses from natural disasters, with $68 billion concentrated in the U.S. This high financial impact is attributed to the concentration of valuable insured properties. Homeowners are typically covered by standard insurance policies, but the increasing frequency of SCS driven by climate change is expected to lead to rising insurance premiums.

Hail is the primary driver of insurance payouts within SCS events, followed by severe winds. These storms cause widespread damage to homes, vehicles, and infrastructure. Projections indicate that if current trends persist, SCS will become the third-costliest natural disaster globally in the next decade due to reduced economic productivity and infrastructure closures. Certain regions, including the Midwest and northern Texas, are experiencing faster insurance cost increases due to their heightened vulnerability to these storms.