Impact of Roof ACV on Claims in Severe Convective Storms
Aon plc, a leading global professional services firm, has released a groundbreaking analysis suggesting that roof Actual Cash Value (ACV) endorsements could decrease average claim costs from severe convective storms (SCS) by approximately 30%. This strategic insight aims to support U.S. homeowners insurers in managing rising loss costs while ensuring affordable storm coverage.
The comprehensive study, titled Aligning Risk and Reality: Reflecting Roof Actual Cash Value in Severe Convective Storm Risk for Homeowners, examines data from seven regional insurers, highlighting 77 notable SCS events over five years. By assessing policies with and without roof ACV terms, the report quantifies residential claims impact. Findings indicate that roof ACV implementation can result in cost-effective insurance for policyholders, with premium credits up to 38% for aging roofs in SCS-prone states.
Steve Hofmann, CEO Americas of Reinsurance Solutions at Aon, remarked that insurers face pressure from convective storm volatility, notably from hail and wind losses impacting profitability. Aon's commitment lies in equipping the sector with advanced analytics and risk management strategies to enhance underwriting precision and portfolio efficacy.
According to Aon's 2026 Climate and Catastrophe Insight report, SCS has become the leading cause of insured catastrophe losses in the U.S., with insured losses totaling $164 billion between 2023 and 2025. The rise in such losses is attributed to expanding urban exposure, as seen in Dallas/Fort Worth, where significant growth has placed more aging roofs at risk during storms.
Adam Dawson, Director of U.S. Reinsurance Catastrophe Analytics at Aon, stated that severe convective storms pose significant challenges for homeowners insurers. He emphasized the need to understand roof vulnerability and aid policyholders in risk mitigation prior to storm events.
Aon’s report identifies a modeling gap for reinsurers, as many catastrophe models assume replacement-cost coverage, overlooking roof ACV endorsements. This could lead to inflated loss estimates for SCS events, particularly concerning hail.
The study highlights the importance of detailed roof data in underwriting and claims management, noting that knowledge of roof age, cover, and condition empowers insurers to make informed decisions. Proactive maintenance and understanding of roof vulnerability are crucial to reducing loss, fostering sustainable coverage and heightened homeowner resilience.