Tornadoes, Not Hurricanes, Pose the Biggest Homeowner Threat

For years, homeowners have viewed hurricanes and wildfires as the disasters most likely to devastate their properties. But a different kind of extreme weather is now emerging as an even greater threat.

Tornadoes, hailstorms and intense thunderstorms have become the top driver of insurance losses in the United States, pushing up home insurance premiums even in communities far outside the country’s best-known disaster hotspots.

A new report from climate risk research firm First Street found that “severe convective storms” — a category that includes tornadoes, destructive wind, hail and lightning — surpassed tropical cyclones in 2025 to become the world’s most expensive insured natural disaster.

The United States is bearing the brunt of that shift. According to the report, the country accounts for almost 80 percent of global insured losses tied to severe convective storms.

While hurricanes are largely a coastal danger, severe thunderstorms and related storms can sweep across huge stretches of the country with limited warning, damaging homes across the Great Plains, the Midwest, the South and beyond.

The cost of that damage is mounting quickly.

Franklin Manchester, a global insurance advisor at analytics firm SAS and a former insurance executive with more than 20 years in the industry, said growing climate volatility is prompting insurers to reassess how they calculate and price risk.

Manchester said these so-called “secondary perils” — including hailstorms, severe thunderstorms and flooding, which historically drew far less attention than hurricanes — have become the insurance industry’s central threat.

According to Swiss Re data cited by Manchester, secondary perils accounted for 92 percent of insured catastrophic losses globally, highlighting how smaller but more frequent disasters are creating enormous costs.

‘The models insurers use to determine rates and understand potential loss are becoming less and less accurate as climate risk evolves,’ Manchester told the Daily Mail.

The changing risk landscape is already affecting homeowners through higher premiums, larger deductibles and, in some cases, difficulty obtaining coverage.

Insurance companies have pulled back from some of America’s most vulnerable areas, including parts of Florida and California, where hurricanes, flooding and wildfires have caused billions of dollars in losses.

But experts warn the problem is spreading far beyond those states.

‘Unfortunately, nowhere is safe,’ warned Manchester, pointing to events such as Hurricane Helene’s devastating impact on Western North Carolina in 2024 as an example of extreme weather striking places that were previously considered lower risk.

The insurance expert said one of the biggest threats facing homeowners over the next decade is flooding.

‘Flooding can happen literally anywhere,’ Manchester said, adding that flood maps are outdated and flooding remains the natural disaster with the least amount of insurance coverage purchased.

The growing cost of coverage could also begin to affect the housing market.

Manchester said rising premiums are not necessarily the biggest threat to affordability – but access to insurance is.

‘No bank will lend you money without insurance, regardless of the cost,’ he said.

However, he warned that expensive insurance can still reduce a home’s value, particularly if the property has experienced previous climate-related damage.

‘If the property has experienced a loss previously due to climate risk, that is discoverable and a deterrent for the insurer, especially if that loss is flood related,’ he said.

Despite the growing insurance threat, climate risk has not yet become a dealbreaker for most buyers, according to James Harris, CEO of real estate platform Breezy and a veteran real estate agent with more than 20 years of experience and $5 billion in sales.

‘Climate risk is absolutely becoming part of the conversation, but it’s rarely the deciding factor,’ Harris told the Daily Mail.

‘Buyers still prioritize lifestyle, family, work, schools, and long-term confidence in a location. If someone has always dreamed of living on the coast or in the mountains, they’re often willing to accept the risk provided they understand it and can insure and protect it properly.’

Harris said demand remains strong in popular markets such as Southern California, Florida and parts of Texas despite growing concerns about extreme weather.

‘Buyers are becoming more informed and asking better questions about insurance, mitigation, and resilience,’ he said. ‘But the right home in the right location still commands strong demand.’

However, he believes climate risk will increasingly become another factor buyers weigh – especially when it comes to insurance costs and whether homes are built to withstand future weather events.

‘The biggest impact is likely to be on insurance costs, building standards, and how homes are designed and protected,’ Harris said.

‘Buyers won’t stop pursuing great locations, but they’ll expect greater transparency, and they’ll increasingly value homes that are built or renovated to withstand future climate challenges.’