Q1 2026 Property Claims Report Shows Significant Decline and Rising Costs
The Verisk Property and Restoration Solutions Q1 2026 Quarterly Property Report reveals a significant decline in U.S. property claims, with figures dropping 8.9% from the previous year and 13.13% below the five-year average. This downward trend has been ongoing since early 2025. Despite severe winter storms in the eastern U.S. and a notable event in Hawaii, the volume of claims experienced a sharp reduction. The report indicates that the average U.S. replacement cost value initially appears lower at $16,079 but could reach $17,687 after adjustments, marking it as the second-highest annual figure.
Winter storms Fern and Hernando were major contributors to claims during the quarter, leading to over 46,000 incidents related to ice, snow, and structural collapses, totaling an estimated $478 million in replacement costs. Approximately 83% of these claims were resolved by the report's publication. A significant wind event in the Central U.S. in March affected over 1.5 million properties, with Ohio witnessing the second-highest claim volume. Meanwhile, Hawaii saw a steep rise in catastrophe-related claims, particularly from a March Kona low, resulting in over 2,000 wind, water, and flood claims on Oahu, valued at about $14 million.
Texas recorded the highest claim volume, followed by Ohio and California. Florida saw a 65.7% reduction in claims due to late hurricane claims reporting from the previous year. Excluding some fires in California, the national severity of claims decreased in the first quarter of 2026 compared to the 2025 adjusted figures. Water claims were the most prevalent, accounting for 31.1% of the overall volume, while ice and snow claims surged by 188.7% from the previous year. Conversely, hail claims decreased by 23.6%, correlating with a decline in severe hail occurrences.
On the cost front, U.S. reconstruction expenses rose 3.4% year-over-year through March 2026, while Canada experienced a 2.5% increase. Labor and materials costs showed modest growth, with concrete masons seeing the highest increase in labor costs, and lumber prices declining due to oversupply. Fuel costs saw a substantial rise, influenced by geopolitical tensions, impacting construction cost dynamics, particularly equipment and trucking expenses.
Dan Sanford of Berkshire Hathaway Specialty Insurance emphasized the volatility in the energy sector, pointing out how geopolitical and regulatory changes have increased litigation risks for directors and officers. He highlighted the rapid evolution in power generation and transmission sectors driven by tax incentives and subsequent regulatory compliance requirements, which pose significant challenges. Sanford stressed the importance of maintaining thorough records to support legal defenses in these environments.
Sanford also noted that shareholder litigation could arise when companies fail to meet expectations. BHSI emphasizes partnering with advisors and maintaining strategic documentation to mitigate legal risks, especially in a rapidly changing market environment. Additionally, they provide resources to help companies manage growing exposures and ensure they capitalize on emerging opportunities effectively.