According to the Official Data Foundation’s analysis of government data, auto insurance premiums have increased 161% since 2008, outpacing general inflation by a wide margin. In the same timeframe, insured losses related to hailstorms — a major driver of auto claims — have increased fivefold in the U.S., costing an estimated $10 billion annually. Research has linked climate change to larger hailstones, which can produce deeper and bigger dents.
As the incidence and severity of hailstorms, hurricanes, flooding, and tornadoes increase, insurance providers field more claims and face higher repair costs. These outcomes often prompt premium increases, particularly in areas prone to severe weather.
Learn more: The insurance you need to protect your vehicle from flood damage
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State legislatures regulate insurance rates to prevent excessive charges. The process requires insurance companies to share detailed risk assessments and justify their expected claims and policy-management costs. Weather factors into the risk analysis and projected claims cost, both overall and on an individual policy basis.
A rough weather season can cost an insurance company millions in claims across multiple insurance lines, including homeowners insurance, auto insurance, and business insurance. In the third quarter of 2024, insurer Allstate absorbed $1.2 billion of catastrophe losses spread across more than 100,000 claims related to Hurricanes Beryl, Debby, Francine, and Helene.
Auto claims related to weather can arise from direct damage and a higher incidence of accidents. Causes of direct damage include:
Hail. According to Matt Brannon, data journalist for Insurify, hail-related damages made up 12% of auto claims in 2023, up 9% from 2020. Brannon noted that "hail-related claims are also about 26% more costly to repair than the average repairable claim."
Storm surge flooding. High floodwaters can cause extensive damage to a vehicle's electrical system and interior. Mechanical functions can also break down when the water carries dirt and sand into the engine compartment and other systems. Repair costs often exceed the car's value, prompting the insurance company to declare the vehicle a total loss.
High winds. High winds from tornadoes, hurricanes, and severe storms can cause downed trees and flying objects that land on vehicles. In extreme cases, wind can pick up vehicles and slam them into buildings or the ground.
Indirectly, traffic accidents and collisions are more common in poor weather conditions. Brannon reported that "wet pavement is a factor in 15% of crashes, with snow and sleet a factor in 4% of crashes."
Learn more: How much does car insurance increase after an accident?
Travis Hodges, managing director of VIU by HUB, a digital insurance platform, also noted the problem of severe storms occurring in areas unaccustomed to them. Drivers who are inexperienced with ice, snow, and wind can be more prone to accidents.
Alongside increasingly severe weather events, other factors are pushing the cost of auto repairs higher. Insurance service provider CCC Intelligent Solutions highlights five significant trends affecting auto claim losses in its Crash Course Q1 2025 Report:
Aging vehicles. Consumers are delaying new car purchases due to elevated costs and interest rates, plus supply constraints.
More EVs and hybrids. EV and hybrids have more expensive parts and higher repair costs.
Advanced safety features. Driver assistance features are complex and expensive to repair.
Increasing medical costs. Bodily injury claim amounts are on the rise as U.S. healthcare costs escalate. The average bodily injury claim in 2023 was $26,501, up from $20,925 in 2020, according to the Insurance Information Institute.
High total loss frequency. Depreciation of used cars and higher repair costs are increasing the frequency of total loss declarations.
In short, auto repair costs are rising as older vehicles age and new cars become more complex. Higher healthcare expenses are also increasing auto claim costs. These trends magnify the losses related to hailstorms, hurricanes, and tornadoes, and provide more data to support higher auto insurance premiums.
Learn more: Car insurance rates are climbing. Here are 4 reasons why and 11 ways to save.
Brannon said drivers in areas prone to severe weather are likely to see the most significant rate increases. He cites Minnesota as an example, where insurance rates increased 58% in 2024. "The state experienced several waves of severe storms, producing heavy rainfall and record-breaking, 6-inch hailstones," Brannon explained.
According to the National Oceanic and Atmospheric Administration's National Centers for Environmental Information, the South, Central, and Southeast regions of the U.S. incurred the largest cumulative weather-related damage costs between 1980 and 2024. The three states with the highest weather-related damage costs are Florida, Texas, and Louisiana.
Learn more: Experts: Buy more than just the minimum amount of car insurance in Florida
These conclusions were based on a review of weather events that each cost more than $1 billion in damage. Tropical cyclones, droughts, severe storms, and inland flooding were identified as the most destructive weather patterns.
Learn more: Everything you need to know about car insurance in Texas
According to the Bureau of Labor Statistics, the cost of auto insurance in April 2025 was up 6.4% from the prior year. Relative to two years ago, auto insurance premiums are 30% higher.
Bannon said inflation and insurer losses are the two main drivers of premium increases. Climate change is a factor because weather influences insurer losses. "Climate change brings more frequent and severe storms that result in more claims and costlier repairs," Bannon explained. "When insurers pay out more in claims," he continued, "they often pass those costs onto policyholders."
Hodges agreed. "Unpredictable [weather] events, combined with increases in repair costs and extended repair times, are all fueling the sharp rise in auto insurance premiums."
Weather-related damages can lead to claims against your collision, comprehensive, or liability insurance.
Comprehensive insurance helps pay to repair your car after a non-collision accident. This includes damage from falling trees, hail, flying objects, and floods.
Comprehensive is an optional coverage that requires you to pay a deductible before any claims are paid.
Collision insurance funds repair costs for your car when you are at fault in an accident. Weather can lead to a collision claim if heavy rain, wind, or icy conditions contributed to the accident. For example, you may be driving too fast in a storm and lose control on wet pavement. If you hit another car or an object, such as a tree, your collision insurance pays to fix your car.
Collision, like comprehensive, is an optional coverage that has a deductible.
Liability insurance pays for injuries and property repairs resulting from accidents you cause. Weather can be a contributing factor, but many liability claims are not weather-related.
If someone else causes an accident that leaves you with medical bills or repair expenses, that person's liability insurance should absorb those costs.
Learn more about bodily injury liability and property damage liability
Gap insurance pays off your auto loan if your car is deemed a total loss and the payout is less than your loan balance. Weather can tap your gap insurance if your car is submerged and extensively damaged by a storm surge.
Gap insurance is optional coverage, available for newer cars only. There is no deductible.
Learn more: Most common types of auto insurance explained
Tim Manni edited this article.
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