Several drivers are contributing to the rise in expensive severe convective storms: 1) population growth in high-risk areas; 2) non-resilient physical assets; and 3) rising building premiums.
Population growth in areas prone to severe storms has increased asset exposure and the physical assets in harm's way are not designed to withstand high winds or hail. Meanwhile, building premiums to rebuild after severe storms are increasing.
In this edition of The Weekly, we share a condensed version of a new article by Abby Ross, CEO of The Resiliency Company, on the four convictions underpinning the opportunities in the Adaptation Economy.
The Weekly: The Rising Costs of Severe Convective Storms
Several drivers are contributing to the rise in expensive severe convective storms: 1) population growth in high-risk areas; 2) non-resilient physical assets; and 3) rising building premiums.
This latest storm system follows what has already been a busy month for severe weather in the Midwest, drawing attention to the dynamics at play that make severe storms increasingly costly for communities nationwide.
Several drivers are contributing to the rise in expensive severe storms:
Cost Driver #1: Population growth in areas prone to severe storms has increased asset exposure
Population growth has concentrated more people and assets in storm-prone corridors. Texas, one of the most hail-battered states in the country, grew 40% over the last two decades and continues to lead the nation in population growth. The South accounted for 87% of the U.S.’s total population growth in 2023 and added 1.2 million residents in 2025 alone. That influx has fueled new construction and development. A storm that once would have touched down in an empty field is now hitting a subdivision.
Cost Driver #2: The physical assets in harm's way are not designed to withstand high winds or hail
In 2022, State Farm reported that 80% of the company’s total claims paid for hail damage went to homeowners, and the overwhelming majority were for standard roofs that, in hail-prone areas, last half as long as roofs elsewhere (7-10 years vs. 20 years). Add to that aging windows, garage doors that aren’t wind-rated, unscreened HVAC units, and an expanding inventory of hail-vulnerable solar panels (on 7% of U.S. homes today, projected to double by 2030), and risk exposure grows.
Cost Driver #3: Building premiums to rebuild after severe storms are increasing
The cost to rebuild is also making storms more expensive. According to Swiss Re, building costs are rising faster than the overall rate of inflation, which leads to higher reconstruction costs and higher claims. Meanwhile, the average claim amount is increasing as the value of assets increases.
Where to Go From Here
No panacea can dramatically reduce the costs of severe storms. More people and assets in places that are likely to experience severe storms translates into higher costs. But there are steps that the private sector can take to fortify the assets across America’s heartland where such storms are most common.
These opportunities to enhance resiliency and reduce costs, outlined in our Severe Storms Briefing Part II, include: 1) investing in more resilient roofing; 2) adopting more resilient construction practices; and 3) investing in new innovations and technologies.
For a full breakdown of the growing costs of severe storms, read our updated Severe Storms Hazard Briefing here.
Public Natural Catastrophe Reinsurance: What Other Countries Do | Brookings | This Brookings piece surveys how other countries have structured public reinsurance, and what typifies programs that stabilize markets. The most durable systems share a few features: risk-based pricing, mitigation incentives, mandatory participation, and funding backstops that rarely require taxpayer transfers.
How Extreme Weather and Aging Infrastructure Led to Months of ‘Musty’ Water in One Ohio Village | Inside Climate News | A prolonged water crisis in Cadiz, Ohio, is illustrating how climate-driven weather shifts are complicating drinking water management for small communities. Many water utilities still rely on historical weather patterns to guide planning, even as climate change brings more volatile rainfall cycles that increase turbidity and strain outdated treatment plants.
Odds Rise That El Niño Will Soon Bring Weather Extremes | New York Times | NOAA now puts the odds of El Niño arriving by August at 80%, with a one-in-three chance it matches the severity of the 2023-24 event that drove record global temperatures. The timing is awkward: FEMA has shed thousands of workers, and an agency overhaul remains unresolved. A strong El Niño would test a disaster response apparatus that has been significantly hollowed out.
Read more about resilient public infrastructure and government solutions on The Epicenter here.
Real Estate & Construction
How to Factor Climate Risk Into Your Home Search | NerdWallet | Written for Canadian homebuyers but relevant to the U.S. as well, this practical guide covers how to evaluate a property's climate exposure before signing, using online tools like ClimateCheck and Climatevaluation.com, reviewing seller disclosure statements, and verifying insurance availability before committing.
Building Resilience: Integrating ESG and Climate Readiness in Real Estate | Lexology | Buildings with green certifications command rental premiums of 6-11% and sale price premiums of up to 25%, per MSCI research. This piece argues that ESG and climate readiness are prerequisites for maintaining asset value, and suggests priority resilience measures across building engineering, supply chain control, and financing.
Read more about resilient real estate on The Epicenter here.
Private Investment
Why a Short, Sharp Climate Shock Affects Your Pension More Than a Slow, Looming Threat | The Conversation | Investors react faster to sudden climate events than to slow-moving risks like rising seas or prolonged drought, even when the long-term damage from the latter may be just as severe. Vivid, immediate risks capture attention in ways that gradual ones don't. For pension funds designed to manage risk over decades, that perceptual gap is a structural vulnerability.
Colorado Purchases Strike Team of Large Wildfire Suppression Drones | The Hotshot Wake Up | A snapshot of where wildfire technology is heading: Colorado has acquired a drone strike team capable of delivering 250 gallons of suppressant foam, Ring has launched an AI-powered wildfire detection program using home camera footage, and Arizona fire agencies are piloting OroraTech's satellite detection system.
Read more about private investment on The Epicenter here.
What is Resiliency? These 10 Examples Prove the Point | The Epicenter Editors | If each $1 invested in disaster preparation saves $13 in economic costs, damages, and cleanup, then it's clear that investing in the preparation for climate-related catastrophes produces a higher ROI than just focusing on recovery alone. But what, exactly, does that preparation look like?
States Should Not Become Reinsurers of Last Resort | Matt Posner | States are making a mistake by using public reinsurance mechanisms to address rising insurance costs. Legislators should invest in climate resilience and risk reduction rather than transfer risk to taxpayers and ignore the underlying drivers of catastrophic insurance losses.
From Recovery to Resilience: NYC's Innovative Response to Hurricane Sandy | The Epicenter Editors | The Epicenter editors interviewed Daniel Zarrilli, former Chief Resilience Officer for New York City and current Chief Climate & Sustainability Officer at Columbia University, about his work during the post-Hurricane Sandy recovery effort.
The Statistic of the Week
One in three
Nearly one in three homeowners surveyed by Insurify said they would drop their insurance coverage altogether if costs keep climbing.
Have thoughts to share or want to add your voice to the conversation? Reach out!
The Epicenter helps decision makers understand climate risks and discover viable resilience solutions. The Epicenter is an affiliated publication of The Resiliency Company, a 501(c)3 nonprofit dedicated to inspiring and empowering humanity to adapt to the accelerating challenges of the next 100+ years.
Population growth in areas prone to severe storms has increased asset exposure and the physical assets in harm's way are not designed to withstand high winds or hail. Meanwhile, building premiums to rebuild after severe storms are increasing.
Twenty-three billion-dollar weather and climate disasters struck the United States in 2025, revealing important takeaways for decision-makers in the real estate, public infrastructure, and insurance sectors.
Unexpected disasters are causing damage in unlikely places, forcing decision-makers in the public and private sectors to prepare for the most common disasters in their region as well as the rare, once-in-a-hundred-year ones. But strategies exist to help decision-makers prepare for the unexpected.
Across the U.S., the average annual total costs of earthquakes is $14.7 billion, with the average earthquake costing between $1.5 to $3 billion. Adopting the latest seismic resilience codes can make buildings more earthquake-resistant and financial instruments can help communities rebuild quickly.
