Verisk's Q1 2025 Property Report Highlights Declining Claims Volume and Rising Costs

Verisk released its Quarterly Property Report January–March 2025, presenting detailed data on property claims, reconstruction costs, and market trends across North America. According to Verisk, claims volume continued to decline in the first quarter of 2025, marking the lowest noncatastrophe claims count in 5 years despite significant weather events. Meanwhile, the average national replacement cost value surged 46 percent year-over-year, largely due to the impact of California wildfires.

Per the report, catastrophe claim volumes remained stable compared to 2024, with "Tornado Alley" states like Kentucky and Nebraska experiencing substantial increases in tornado-related claims—up 210 percent and 203 percent, respectively. In contrast, the Pacific Northwest saw major decreases in catastrophe activity, including a 99 percent reduction in freeze claims in Washington.

Verisk said the Palisades and Eaton wildfires in California generated nearly 48,000 claims with a combined replacement cost value exceeding $10 billion. The report noted that 23 percent of these claims involved losses greater than $500,000, and smoke damage accounted for 28 percent of the total claims associated with these fires.

According to Verisk, total reconstruction costs in the United States rose 5.2 percent year-over-year, with localized spikes in fire-affected areas. For example, the Pacific Palisades region recorded a 4.24 percent increase during the quarter, well above California's statewide average increase of 1.67 percent. In Canada, reconstruction costs increased 4.7 percent during the same period.

Per the report, labor costs in the United States increased 1.06 percent for the quarter, led by concrete masons at 2.54 percent. Material costs rose 2.42 percent year-over-year, with roofing materials showing the highest annual increase at 2.83 percent. Fuel costs also climbed, rising 3.63 percent in the United States during the quarter.

Verisk highlighted that recent US tariffs and immigration policy changes could create further cost pressures in the construction sector. The report noted the industry's reliance on imported materials—such as lumber and drywall—and on immigrant labor, which accounted for 26 percent of the construction workforce in 2023.

Finally, Verisk said builder confidence, as measured by the National Association of Home Builders/Wells Fargo Housing Market Index, declined during the quarter, signaling potential headwinds for the housing market as 2025 progresses.