The biggest threat to homeowners isn’t hurricanes – it’s tornadoes

Homeowners have long worried about hurricanes and wildfires as the biggest potential threats to their property, but now there’s a new weather threat that’s become an even bigger risk.

Tornadoes, hailstorms and powerful thunderstorms have become the leading cause of insurance losses across America, leaving homeowners facing higher premiums even in places far from traditional disaster zones.

A new report from climate risk research firm First Street found that so-called ‘severe convective storms’ – including tornadoes, damaging winds, hail and lightning – overtook tropical cyclones as the world’s costliest insured natural disaster in 2025.

The US is at the eye of the storm, accounting for nearly 80 percent of global insured losses from such severe convective storms, according to the report.

Unlike hurricanes, which primarily threaten coastal regions, severe convective storms can strike vast areas of the country with little warning, damaging homes from the Great Plains and Midwest to the South and beyond.

And the financial damage is adding up.

Franklin Manchester, global insurance advisor at analytics firm SAS, is a former insurance industry executive with more than two decades of experience. He told us that climate volatility is intensifying and forcing insurers to rethink how they measure risk.

Manchester says that ‘secondary perils’ – hailstorms, severe thunderstorms and flooding that historically received much less attention than hurricanes – are now the main threat to the insurance industry.

Tornadoes, hailstorms and powerful thunderstorms are driving a growing share of insurance losses across America

The US is at the eye of the storm, accounting for nearly 80 percent of global insured losses from such severe convective storms, according to the report 

Franklin Manchester, global insurance advisor at analytics firm SAS

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.

Franklin Manchester, global insurance advisor at analytics firm SAS, told the Daily Mail that there’s not one place in the US that’s safe from natural disasters

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

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.’

‘Severe convective storms’ – including tornadoes, damaging winds, hail and lightning – overtook tropical cyclones as the world’s costliest insured natural disaster in 2025

James Harris, CEO of real estate platform Breezy, told the Daily Mail that areas like Southern California – that was hit hard by the devastating 2025 wildfires – are still H๏τ commodities for buyers despite the risk of natural disasters

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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.’