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LA wildfires push US home insurance severity to record high in 2025
LexisNexis said the January 2025 Los Angeles fires, including Palisades and Eaton, produced an estimated $61.2 billion in losses, more than half of the US total $115 billion from 23 billion-dollar climate disasters last year.
LexisNexis Risk Solutions said its 2026 US Home Trends Report found home insurance severity reached an all time high even as overall claims frequency continued to decline after the post pandemic period.
The report showed All Peril severity rose 25.9% from 2024 to 2025, and increased 93.2% versus 2019, while All Peril loss cost fell 4.4% and frequency dropped 23.8% year over year. However, loss cost remained the third highest in seven years and about 50% above 2019 levels, indicating individual claims have become more expensive even though fewer are occurring.
LexisNexis attributed much of the severity jump to an unusually costly year for catastrophic weather. It said the US recorded 23 climate disasters worth $1 billion or more in 2025, totaling $115 billion, the third highest annual figure on record, and that the January 2025 Los Angeles wildfires accounted for more than half of that total, with an estimated $61.2 billion in losses.
For peril trends, the report said Fire and Lightning were the defining drivers of the year, with loss cost up 76.8%, frequency up 6.0% and severity up 67.3% year over year, almost entirely tied to the January fires. George Hosfield, vice president and general manager of home insurance at LexisNexis Risk Solutions, said the results reflect a market under sustained strain from rising severity, inflation driven replacement costs, and shifting climate driven loss patterns.