Overview
Hail is often associated with Texas. And rightly so. Headlines across the major metro areas of Dallas-Fort Worth, San Antonio, Austin, and Houston routinely report damage from hail hitting densely populated areas during the severe convective storm season.
But Cotality data found that 2025 was a curveball year. Last year, Greater Chicago unseated Dallas-Fort Worth as the metro area most at risk of hail.
Of the $1.52 trillion of Illinois’s exposed reconstruction cost value (RCV), $1.02 trillion of that risk sits in Greater Chicago. That translates to two-thirds of the entire state’s financial hail exposure packed into one area.
This shift isn’t due to Chicago suddenly seeing more storms or bigger hailstones than Texas; it’s occurring because Chicago has more value—and more vulnerable building materials—sitting in the path of "Moderate" and "High" risk zones. That value is built into structural components like age and type of roof, the presence of roof-top electrical and HVAC equipment, and older properties.
Nor is hail the only risk looming over the Windy City. Illinois is in the crosshairs of other SCS-related perils, like tornadoes and straight-line winds. Thanks to Chicago’s concentrated risk — both physical and financial — the cost of a storm is amplified by its density and further compounded by its home values. Cotality’s February 2026 housing report noted housing prices in the area jump nearly 5% year over year, and increasing migration drove investor market share to 30%, which can further increase property values and, eventually, reconstruction costs.
Consolidated risk is a pattern that could be replicated in other major metro areas, which is why risk can no longer be assessed at the state level; it must be evaluated at a micro-level, driven by the concentrated reconstruction value of the built environment.
A near-miss to consider
In June 2023, a cluster of damaging hailstones hit over 680,000 residential homes in Texas, causing between $7 billion and $10 billion in insured losses. Cotality data shows that figure would have tripled if the storm had shifted just 15 to 20 miles north—a completely fathomable meteorological scenario — to impact the Dallas-Fort Worth metro. Had a storm of that magnitude hit Chicago, that loss estimate soars exponentially.
The takeaway here is that, while meteorology might predict the storm coming, it is the structures that determine the true cost.
Why SCS is now the costliest insured peril
Building exposure may carry more weight when looking at SCS risk, but we can’t turn a blind eye to the hazard. Severe convective storms were once considered minor perils. However, the hail, straight-line winds, and tornadoes that they bring are now the biggest loss driver for insurers and the homeowners they cover.
In 2025, damaging hail (two inches or greater) fell across the U.S. on 142 days—significantly higher than the 20-year average of 122 days. Tornadoes also pose a growing risk. Last year, 76 million homes with a combined reconstruction cost value (RCV) of $27 trillion, in the face of moderate or greater risk from tornadoes.
This isn't an outlier; it’s the continuation of a decades-long upward trend in convective storm volatility.
Underwriters confronting SCS risk require a multi-dimensional approach that fuses meteorological probability with deep, property-specific structural data.
Leveraging a full spectrum of intelligence
The Chicago Anomaly provides proof that a "Moderate" hazard zone can serve as the bedrock for a catastrophic loss event when it intersects with high-density, high-value property. Relying on state-level averages or historical weather data alone is no longer a viable strategy for maintaining a profitable portfolio.
To survive this era of volatility, underwriters need weather data as well as up-to-date property insights. By balancing the weather hazard with granular building intelligence, underwriters can move beyond guesswork, price with absolute confidence, and ultimately protect the long-term sustainability of their portfolios.
