Are You Underinsured for the Next Big Storm? Understanding Catastrophe-Driven Home Insurance Challenges
In recent years, homeowners across the U.S. have faced a tough reality: the cost and frequency of catastrophic events are climbing, and insurance companies are feeling the strain. According to a 2025 report by LexisNexis Risk Solutions, home insurers saw a seven-year high in claims severity in 2024, with catastrophic events — hurricanes, tornadoes, wildfires, and severe hail — making up a growing share of total losses.
The Rising Cost of Catastrophes
As severe weather grows more frequent and rebuilding costs continue to rise, insurers are paying out more for every claim. This drives higher premiums and tighter underwriting. Even homeowners far from the coast or major disaster zones aren’t immune — wind, hail, and flood losses are appearing in new regions once considered low-risk.
What Homeowners Should Check Now
Coverage Limits – Many policies haven’t kept pace with rising construction and material costs. Make sure your dwelling coverage reflects today’s rebuilding prices, not what it cost years ago.
Replacement Cost vs. Actual Cash Value – Replacement cost coverage pays what it takes to rebuild your home today, while actual cash value deducts for depreciation — a critical difference when rebuilding costs surge.
Catastrophic Event Coverage – Standard homeowners insurance doesn’t automatically cover floods or earthquakes. Review your policy and consider supplemental protection if you’re in a risk-prone area.
Deductible and Policy Updates – Check your deductible and policy endorsements annually, especially before storm season.
Why This Matters
Even one major event can test the limits of your coverage. Verifying your policy’s protection now can prevent financial shock later. With climate patterns shifting and rebuild costs continuing to climb, staying proactive is key.
Takeaway
Catastrophic losses are reshaping the insurance landscape — and your home policy needs to keep up.
👉 Review your coverage with RISE Insurance today to ensure you’re fully protected before the next big storm. 📞 423-541-1111
