Home Insurance Claims Fell 19% in 2025, But Premiums Still Rising

Insurers saw their best financial year in a decade, but homeowners aren't seeing the savings

Apr. 16, 2026 at 11:20am

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An extreme close-up of intricate gears, levers, and machinery in a banking or financial institution, conveying the complex inner workings of the insurance industry and its ability to generate substantial profits despite declining claims.The insurance industry's record profits in 2025 did not translate to lower premiums for homeowners, raising questions about transparency and accountability.Los Angeles Today

According to Verisk's Annual Insurance Claims Trends Report, homeowners insurance claims dropped 19% year-over-year in 2025, falling to 5.27 million, the lowest level in five years. Personal auto claims and commercial property claims also declined. However, the national average homeowners insurance premium is still projected to rise roughly 4% in 2026, as insurers collected significantly more in premiums than they paid out in claims and operating costs.

Why it matters

The disconnect between falling claims and rising premiums highlights the complex dynamics of the insurance industry. While a quiet hurricane season and other factors contributed to the claims decline, insurers' underlying costs and risk exposure have not fundamentally improved. This raises questions about whether homeowners will see any meaningful relief on their insurance bills.

The details

The biggest factor behind the 2025 claims decline was a quiet Atlantic hurricane season, which removed a significant category of catastrophic loss from insurers' books. However, other risks like wildfires continue to drive up costs, with the LA wildfires in 2025 generating over 7,800 smoke damage claims in the first 30 days. Meanwhile, the insurance industry posted a net underwriting gain of approximately $63 billion for full-year 2025, nearly triple the 2024 gain, as net written premiums grew 4.8% to $971 billion.

  • The 2025 Atlantic hurricane season was unusually quiet, with no major hurricanes making landfall on the continental United States during the second half of the year.
  • The LA wildfires that began in January 2025 generated more than 7,800 smoke damage claims in the first 30 days.
  • Verisk and APCIA data released in March 2026 showed the U.S. property and casualty insurance industry posted a net underwriting gain of approximately $63 billion for full-year 2025.

The players

Verisk

A data analytics provider that released the Annual Insurance Claims Trends Report in April 2026.

Shane Riedman

President of anti-fraud analytics at Verisk, who noted that while overall claims volumes declined, the underlying loss patterns tell a different story.

American Property Casualty Insurance Association (APCIA)

An industry group that released data on the insurance industry's financial performance in 2025.

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What they’re saying

“While overall volumes declined, the underlying loss patterns tell a different story.”

— Shane Riedman, President of anti-fraud analytics at Verisk

What’s next

Insurers will need to continue monitoring evolving risks like wildfires and coastal flooding, as well as the impact of factors like construction costs and labor shortages, to determine future rate adjustments. Homeowners can take proactive steps like shopping policies at renewal, reviewing coverage limits, and making home-hardening improvements to potentially lower their premiums.

The takeaway

The disconnect between falling insurance claims and rising premiums highlights the complex and often opaque nature of the insurance industry. While insurers saw their most profitable year in a decade, homeowners are not seeing the full benefits, raising questions about transparency and whether the industry is passing along savings to policyholders.