The first three months of 2025 brought devastating wildfires to California, significant wind and hail events to Texas, and substantial increases in tornado activity to “Tornado Alley,” but claim volume decreased to a five-year low, according to a quarterly property report from Verisk.
The findings in Verisk’s “Quarterly Property Report January–March 2025” show that claims severity rose due to the California wildfires while property claims counts continued a downward trend that began in 2023.
Claims costs skyrocketed in the first three months, with the national average replacement cost value increasing 46 percent compared to the same period a year ago. The increase in replacement cost value was primarily driven by the Palisades and Eaton fires, which generated approximately 48,000 claims totaling roughly $10 billion, Verisk found.
California experienced a 1,805 percent increase in replacement cost value (RCV) from Q1 2024 to 2025, the report found. The average claims estimate from the wildfires was $337,000.
This extreme increase in RCV was counterbalanced in the first quarter by the fact that 33 states experienced a decrease in severity from the same quarter in 2024, the report said. Maine, Delaware, Montana and Oregon saw an average 80-95 percent decrease in severity.
Total claim volume for the quarter was down about 7 percent. The decrease came primarily from non-catastrophe claims, while catastrophe claims stayed steady, Verisk found.
Texas led the country in claim volume with 161,000 claims. California had the next highest with 96,600, followed by Florida (48,500). Missouri (48,200), North Carolina (36,000) and Pennsylvania (35,700).
Texas accounted for 95 percent of all Q1 catastrophe (CAT) events, driven by wind and hail events. Several other states saw significant increases in CAT claims, the study found, ranging from a 45 percent jump in Oklahoma to over 200 percent in Kentucky and Nebraska. Most of these CAT claim increases were from wind and hail claims tied tornadoes, the study said.
Many states, including those in the Pacific Northwest, saw a drop-off in CAT claims. Washington had a 99 percent decrease in freeze claims, Oregon had a 98 percent decrease in ice and snow claims, and Maine had a 98 percent decrease in wind claims from 2024 to 2025, the report found.
Verisk found that billable labor costs slowed in the first quarter. Labor costs increased 1.06 percent across the United States compared to 1.42 percent in the previous quarter.
The report cautioned that U.S. immigration and tariff policies could also have a potential impact on construction and material costs. The construction industry relies heavily on imported materials (28 percent of lumber, 24 percent of concrete, 36 percent of gypsum) and immigrant workers (26 percent of the workforce), the report said.
Photo: A worker stands atop a home being rebuilt after the Palisades Fire in the Pacific Palisades neighborhood of Los Angeles in April 2025. (AP Photo/Damian Dovarganes)
This article was previously published by Insurance Journal. Reporter Ezra Amacher is the Midwest editor of Insurance Journal.
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