Property stakeholders increasingly worry about extreme weather
Weather events have taken historic and extreme turns at the outset of 2025 with wildfires, severe thunderstorms and tornadoes impacting the lives of millions.
Events such as these that cause billions of dollars in damage1 have become more common over the past decade, and commercial property stakeholders and business owners are worried about future catastrophes.
Two-thirds of commercial property owners, new construction builders, and business owners in a recent Nationwide survey said they are highly concerned about damages from severe weather and natural disasters.
This level of concern climbs in areas that are prone to hurricanes and wildfires. In states that are at risk of fires, 93% are worried about the risk of severe disasters, and in areas typically hit by hurricanes 86% of property stakeholders are concerned about a disaster.
Taking damage
In 2024, there were 27 weather-related disasters across the nation that each caused more than $1 billion in damages for a total of $182.7 billion in damage costs (the fourth highest total since 1980), according to NOAA.2
Over the last five years, NOAA data shows that there have been 115 billion-dollar events (an average of 23 events per year), resulting in $746.7 billion in total damage costs. During the 1980s, there was an average of 3.3 such events per year, and in the 1990s, this rose to 5.7 billion-dollar events per year (adjusted for inflation).3
This increasing frequency of large natural disasters is putting more people at risk, and according to our survey about a third of property owners have reported damage over the last five years. That figure rises to 54% in wildfire areas and 63% in hurricane states. Damage they report includes:
- Broken windows – 43%
- Structural damage – 41%
- Damaged electrical systems – 39%
- Roof damage – 37%
- Business interruption – 37%
The most common events that damaged property owned by survey respondents were:
- Tropical storms/hurricanes – 42%
- Damaging winds – 35% (24-point increase from 2023 survey)
- Flood – 30%
- Wildfire – 19%
- Tornado – 17% (14-point drop)
- Lightning – 14%
Countering threats
Hurricanes across the Southeast caused $124 billion in damage during 2024. Meanwhile, severe thunderstorms were the most frequent event in the South and Midwest – and had the second highest total damage cost behind tropical weather at $46.8 billion.
Faced with threats like these, property stakeholders are taking steps to protect their structures, and more than 90% across the country say they have a plan to respond to severe weather. About half of survey respondents said they have taken actions to reduce weather risks, including:
- Installing weather-resistant doors and windows
- Installing back-up power systems
- Installing storm shutters or reinforced windows for hurricanes or tornadoes
Overall, though, there is a growing reluctance to enhance building resiliency due to rising construction costs. Only 31% report willingness to invest in measures to improve their properties’ resilience to weather events, a 22-point drop from 2023.
Exploring the level of risk management further, the survey indicates there is opportunity to increase the level of preparation and planning to reduce the impact of an extreme event.
About 1 in 5 agents estimate that less than half of their commercial clients have a risk management plan for severe weather. A significant portion of agents – 66% – also said they either do not prioritize sharing carrier risk management resources or only share resources if asked by the customer.
When it comes to coverage, 26% of commercial property stakeholders admit knowingly carrying inadequate insurance coverage, which is 8 points higher than 2023. Most agents also say at least 4 in 10 commercial customers they serve are underinsured for severe weather impacts, and 42% of property stakeholders said they are willing to reduce insurance coverage as a way to shrink premiums.
Stakeholders also said fewer workers would know what to do if faced with a catastrophic event. Nationally, there was a 16% drop in worker preparation from 2023, and in wildfire- and hurricane-risk states there was a 9% and 13% drop, respectively.
View Mark Berven’s video about climate resilience:
Help stakeholders reduce risk
It’s critical to have risk management conversations about what businesses can do to keep workers safe and minimize damage and disruptions.
Any business can be impacted by severe weather, and a comprehensive risk management plan should be developed to address the specific risks each business faces. According to FEMA, about 25% of businesses do not reopen after a disaster, but having a disaster plan and business continuity plan can help businesses recover and remain operational.4
You can share information about our business continuity program to help implement a plan that is tailored to their needs.
Nationwide’s Risk Management and Client Services team has solutions that can be tailored to individual business needs across a wide range of industries. In particular, you can share resources that can help property owners make their structures more defensible and resilient to extreme weather.
Here are some resources that can help businesses understand the weather threat and implement protection strategies:
Regularly updating property valuations, coverage limits and policy locations also helps ensure that policyholders are protected. With the rising costs and time involved in making repairs, failing to adjust coverage limits can result in higher out-of-pocket expenses. Additionally, reviewing policy details helps identify any gaps in coverage, ensures compliance with current regulations, and provides an opportunity to take advantage of new policy features or discounts.