This post is part of a series sponsored by CoreLogic.
In 2023, the United States faced an unprecedented property risk crisis. This has been highlighted by the wide disconnect between insurance policy pricing and the increasing risks posed by natural disasters. A surge in severe convective storm (SCS) activity, including severe thunderstorms, resulted in unprecedented amounts of insured losses throughout the year, impacting millions of homes across the country.
Severe thunderstorms characterized by straight-line winds, hail damage, and destructive tornadoes have emerged as the leading drivers of insured losses in 2023. These widespread occurrences of SCS losses included multibillion-dollar incidents and had comparable financial impacts. About a large hurricane.
Among these hazards, hail has emerged as a leading cause of insurance losses, affecting vast swathes of the United States. Unlike tornadoes and straight-line winds, hail occurs frequently and can cause significant damage. The extent of the crisis is evident in the staggering number of single-family and multi-family homes affected by hail, which exceeded 10 million across the continental United States that year.
Hailstorms typically peak in late spring and summer, but the 2023 season saw significant activity throughout the year, with multiple large hailstorms impacting more than 100,000 homes. Ta. CoreLogic’s weather validation technology recorded 141 days with significant hail in 2023, the highest number since 2003.
The effects of these storms were particularly pronounced in Texas, the Southeast, and the Plains, where heavily populated areas suffered the most damage. However, not all areas in these states experienced this same increase in hail activity.
A closer look at specific events, such as the severe thunderstorm activity from June 11 to 16, 2023, reveals the severity of the situation. Large hail and strong straight-line winds damaged parts of the Dallas-Fort Worth area, with estimated insured losses ranging from $7 billion to $10 billion, with 95% of the losses due to hail.
Although climate change may play a role in exacerbating more volatile and severe weather patterns, the data suggests that changes in exposure, including growth in residential and commercial home construction, are the main drivers of increased losses. ing. The economic damage caused by severe convective storms is increasing as the number of housing units increases and construction costs rise across the United States.
These challenges highlight the importance of high-quality input data for effective underwriting, pricing, and risk management strategies. Accurate assessment of building characteristics and real-time weather data is essential to strengthen resilience and reduce catastrophic losses.
of core logic® 2024 Severe Convective Storm Risk Report This serves as a clear warning to the insurance industry and policy makers alike, urging proactive steps to address the evolving real estate risk landscape. By taking a data-driven approach and fostering collaboration, stakeholders can better prepare for future challenges and protect communities from the growing threat of severe weather events.
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