Despite the L.A. Fires, Texas Outpaced California in 2025 Q1 Insurance Claims

WASHINGTON - The tragic and historic wildfires in Los Angeles this past January have driven the cost of insurance claims upward in 2025, but even with that event, California still did not lead the nation in the first quarter of the year in overall claims.

That honor went to Texas, which almost doubled California's total number of claims.

Texas saw 161,369 claims filed from January through the end of March, according to Verisk's Quarterly Property Report. That number comprises about a fifth of all the claims filed in the entire country over that period. The Lone Star State's high number of claims were driven by significant wind and hail storms.

There were 96,608 claims filed in California in Q1. The January fires in Los Angeles triggered almost 48,000 of those claims, about half of the number. As of May 12, insurers had paid out over $17 billion to policyholders for the L.A. fires, up from $12.1 billion on March 5.

But Texas has the most expensive storms in the country year over year, as shown by data from the National Oceanic and Atmospheric Administration. In 2024, the Lone Star State experienced 20 storms that caused at least $1 billion in damage. There were only 7 other storms this expensive in the rest of the U.S. In 2023, Texas had 16 of these storms.

Texas also has over 8 million homes at significant risk from various types of storms, and 63,000 homes in Texas have been built in just the last five years that are in areas at high risk for flooding, according to The Wall Street Journal.

APCIA's President and CEO, David A. Sampson, said that the new Texas data shows that the state legislature missed an opportunity during their 2025 session to rein in one of the cost pressures on insurance that they can control: rampant abuse of the legal system by trial lawyers seeking jackpot payouts with the financial backing of shadowy investors.

"Lawmakers can't control the weather or inflation, but they can rein in legal system abuse and help encourage better preparation for severe weather through mitigation and resilience," Sampson said.

APCIA supported legislation this year to rein in excessive lawsuit awards, as well as a bill to establish a grant program to help Texas residents retrofit properties to meet the gold standard for storm-resistance established by the Insurance Institute for Business and Home Safety (IBHS). The National Institute of Building Sciences (NIBS) has found that every $1 spent on natural hazard mitigation in new code construction can save $13 in disaster repair and recovery costs.

"APCIA looks forward to working with the legislature going forward to make progress on positive reforms that can help relieve cost pressure on Texas consumers," Sampson said.

Despite the challenges of Texas-sized weather and legal system abuse, there are signs of stabilization in the Texas insurance market. Inflation hit the U.S. economy hard in 2021 and 2022, and insurance rates are a lagging indicator for inflation. Sure enough, in 2022 and 2023, rates spiked considerably. Inflation drove up the cost of parts for autos, labor, supplies for housing - all the things that insurers have to pay for when an auto or home is damaged or destroyed.

But the Texas insurance market showed progress in 2024, especially in autos. TDI data showed auto rate increases at 4.8% in 2024, down from two years in the 20 percent range. And our own analysis of S&P data showed auto increases among the top 10 insurers in Texas at just 2.3% in 2024. On the home insurance front, TDI data showed 2024 increases dropping, but still high at 18.7%. However, the top 10 homeowner policy writers in Texas only raised rates by only 6.1% (and 0.4% for condos) in 2024.