The Setup: A Year of Chaos… and Crickets
Picture this: Three Category 5 hurricanes tearing across the Atlantic, billions in global damage – and your phone doesn’t ring. Your trucks sit idle. Your crews wait for work that never comes.
Welcome to 2025 – the year that became one of the quietest claim years in recent memory.
According to NOAA data, the 2025 Atlantic season recorded 13 named storms, 5 hurricanes, and 4 major hurricanes – with three Category 5s (Erin, Humberto, Melissa). Only 2005 had more. Yet, claims volume across the industry fell 20 percent year-over-year, hitting a five-year low.
So what happened?
The U.S. simply dodged the storm. Not one hurricane made landfall in the continental U.S., the first time since 2015. Only one tropical storm, Chantal, brushed South Carolina.
A weak Bermuda High steered storms north into open water. Add in Saharan dust and suppressive high pressure, and suddenly America’s busiest season for restoration professionals was also its quietest.
Case in point: Hurricane Melissa. Peaking at Category 5 strength with 160 mph winds, Melissa devastated Jamaica ($6-7B in damage) before veering northeast, sparing the U.S. entirely. Ironically, another system over the Southeast helped steer it away.
“Timing is everything. One catastrophe actually prevented another.”
But while hurricanes ghosted us, something else hit the industry even harder: the “Fear of Filing.”
The Fear of Filing: Where Did the Claims Go?
This wasn’t just a weather story – it was a psychology story.
By late 2025, restoration contractors weren’t losing business to weather – they were losing it due to homeowner anxiety.
Homeowners are increasingly worried that even a routine claim could lead to higher premiums or non-renewal. As insurance availability tightens and costs rise, many may make defensive decisions, not based on damage severity, but on perceived long-term risk to their coverage.
Deductible structures have reinforced this shift. Higher, percentage-based deductibles have changed the math. Many common losses no longer make financial sense to file.
“Homeowners think, ‘If I file this $4K roof leak, will they non-renew me next year?’ So they DIY or pay cash – and we lose the job.”
Result: Small water, wind, and hail claims – the bread-and-butter for many TPAs – are evaporating.
The “New Normal” of 2025: SCS is King
The highest loss activity came from Severe Convective Storms (SCS) – hail, wind, tornadoes. Globally, SCS losses reached $50–61 billion, the third-highest total on record, driven heavily by U.S. events (MunichRe’s NatCatSERVICE catastrophe database).
Even in a “quiet” tropical year, SCS easily outpaced hurricane losses. But the storms themselves shifted eastward, from the classic Tornado Alley to Dixie Alley and the Midwest – Mississippi, Alabama, Georgia, Illinois, Missouri – where population density and roof vulnerability amplify the impact.
2026 Forecast: Don’t Blink
If 2025 was the “Silent Crisis,” 2026 will be the “Wild Card Year.”
An ENSO flip is already underway – La Niña fading to Neutral, then to El Niño by late summer. This creates volatility on all fronts.
Expect freeze events across Texas and the Southeast through March, followed by volatile spring hail and tornado outbreaks in the Neutral phase.
The Atlantic hurricane outlook remains uncertain:
- TSR forecasts ~14 named storms, 7 hurricanes, 3-4 majors
- Overall activity near long-term norms (ACE ~125)
But here’s the trap – El Niño may suppress storm counts, but record-warm Atlantic waters could still supercharge intensity.
“Don’t let El Niño make you complacent. 2011 and 2017 looked similar – low volume, big impacts.”
Bottom line: Don’t count on quiet.
The Final Word
2025 was silent – but it woke us up.
SCS is here to stay. Meanwhile, homeowners are growing more cautious. As a result, volatility lies ahead.
Those who adapt fast and stay operationally agile won’t just survive 2026 – they’ll thrive.
Stay sharp, stay fast, and stay essential.
David Obert
David Obert serves as the Chief Product Officer at Verisk Property Estimating Solutions. In this role, he leads the charge in developing the innovative Xactware suite of products, including Xactimate and XactAnalysis. David’s leadership style is characterized by a deep passion for product innovation and a commitment to excellence, traits that have been instrumental in introducing several new products to Verisk's market offerings. Aside from his professional achievements, David is deeply involved in community service. He contributes his time and effort to Meals on Wheels America, helping to ensure seniors have access to necessary meals and services. Additionally, David collaborates with the Brigham Young University’s Association of Computing Machinery, showcasing his dedication to supporting the next generation of computer science professionals. David holds a bachelor’s degree in Information Technology and a master’s of business from Colorado State University. His journey reflects a blend of technical acumen and strategic leadership, driving product innovation and fostering community growth.
Related Posts
