As per Verisk’s latest Quarterly Property Report, claims volume in the U.S.and Canada continued to decline in the first quarter of 2025, reaching a five-year low, even amid significant weather events across several regions.The first three months of 2025 brought devastating wildfires to California, along with significant wind and hail events to Texas, and substantial increases in tornado activity to “Tornado Alley”.Total claims for Q1’25 quarter reached 1,059,323, comprising 700,394 non-catastrophe (non-CAT) claims and 358,929 catastrophe (CAT) claims.

The non-CAT volume marks the lowest in five years.According to Verisk’s report, overall claim volume declined by about 7% compared to the same period in 2024, which itself had seen a 15% drop from 2023.While last year’s decrease was driven by a sharp 28% fall in catastrophe claims, this year’s decline is largely due to fewer non-CAT claims, with CAT volumes remaining steady.

Texas led the country in terms of claim volume recorded in Q1, driven mostly by wind and hail events.These perils accounted for 95% of all CAT claims and 72% of the state’s total claim count.California followed, where non-CAT water-related claims, primarily from two significant winter storms in January and February, made up 29% of total claims.

Meanwhile, CAT claims related to wind, fire, and smoke (mainly from the January wildfires) represented 33% of the state’s total.Wind, hail, and combined wind/hail events accounted for 47% of all Q1 claims, representing a 7% decrease from the previous year, largely due to a 19% drop in hail-related claims.Water damage was the second most common peril, making up 28.7% of total claims.

However, despite fewer claims overall, the national average replacement cost value soared by 46% year-over-year, heavily influenced by the California wildfires.The Palisades and Eaton fires alone resulted in approximately 48,000 claims totaling around $10 billion, averaging $337,000 per claim.Nationwide, reconstruction costs increased 5.2% compared to last year.

In California, costs rose by 1.67% between January and April, while the Pacific Palisades region saw a steeper rise of 4.24%.Labor costs continued to outpace material costs, with concrete masons experiencing the highest wage increases.Fuel costs offered slight relief, with modest quarterly increases of 3.63% in the U.S.

and 3.58% in Canada.Verisk also highlighted how new tariffs on key construction materials, combined with changes to immigration policy are adding stress to an industry where 26% of the workforce comes from immigrant communities.Combined with reconstruction demands from recent disasters, these pressures are expected to keep costs elevated through the remainder of 2025..

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