Severe Weather Spurs Rising Auto Insurance Costs | Insurify

Insurers have long considered regional factors, including weather, when calculating auto premiums, according to the Insurance Information Institute (Triple-I). But with extreme weather events affecting more people, increasing claims costs are beginning to affect car insurance rates and premiums.

Hurricanes and severe storms drive damage losses

While most people are familiar with the kind of damage a hurricane can cause, severe thunderstorms happen much more frequently, according to property insights company CoreLogic.

Severe thunderstorms can include hail, strong straight-line winds, and tornadoes. And, while the insurance industry typically considers such storms more of a threat to homes and buildings, hail and strong winds can also cause expensive vehicle damage. Hail-related auto claims rose 12% in 2023 and are 22% more costly to repair than the average comprehensive claim, according to tech insights company CCC Intelligent Solutions.

“Extreme weather events are increasing in severity, becoming major disruptors in the auto claims and repair industry,” Kyle Krumlauf, director of industry analytics for CCC, said in a press release.

In the last five years, insurance companies in Florida and Louisiana have experienced significant auto damage losses, reflecting the effects of Hurricanes Ian and Ida, according to S&P Global’s 2024 U.S. Auto Insurance Market Report.

Severe thunderstorms have also caused significant physical auto damage losses in upper Midwestern states, including Minnesota, Nebraska, and Wisconsin, S&P Global reported. In 2024, Texas and Nebraska experienced the most hailstorms with hail 2 inches or bigger, according to CoreLogic’s 2025 Severe Convective Storm Risk Report.

2024 insurance increases in states with highest rise in hailstorms

The factors making each claim more expensive

The “comprehensive” part of a standard auto policy covers physical vehicle damage from weather, like hail, flooding, fire, or a tree falling during a windstorm.

“With claims costs rising, any time a driver files an auto insurance claim to cover damage, insurers are paying out more money,” said John Leach, a licensed insurance agent with Insurify. “For example, high new- and used-vehicle prices mean insurers have to pay out more for a total loss claim.”

Multiple factors contribute to higher claims costs, including continued inflation on auto parts, a shortage of auto technicians, and increasingly high-tech vehicles. Total repair costs for cars manufactured in 2021 were 15–19% higher than cars made in 2015, according to CCC.

Excessive or fraudulent personal injury lawsuits can also lead to higher premiums, according to Triple-I.

“Any factor that causes an increase in claims can affect auto insurance rates,” Leach said. “So, more frequent and intense weather could cause more comprehensive coverage claims, increasing regional risk and affecting premiums.”

Vehicle prices have climbed quickly. New cars are nearly $11,000 more expensive than in January 2020, according to KBB. And a lack of supply has kept used-car prices high as well.

What’s next: Despite rising repair costs, rate hikes are slowing

Research shows the auto insurance industry is recovering from record losses in 2022, according to Insurify’s auto insurance report. Insurify projects car insurance costs will increase another 5% in 2025, a much lower rate than the 42% climb since 2022.

Average premiums decreased in 21 U.S. states in the second half of 2024, according to Insurify data. 

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