Replacement cost values jump from California wildfires

U.S. average replacement cost values jumped 46% in the first quarter, compared to the prior-year period, driven mainly by the California wildfires, even as property insurance claims fell 7% across the country, according to a report issued Wednesday by Verisk Analytics Inc.

The Palisades and Eaton wildfires in California generated nearly 48,000 property claims totaling approximately $10 billion in the quarter, with an estimated average of $337,000 per claim, the report showed. Some 23% of all losses from the fires exceeded $500,000, said Verisk, a Jersey City, New Jersey-based data analytics and technology company.

The average first-quarter replacement cost value was $25,170, compared with $17,280 in the prior-year period, Verisk said.

Total reconstruction costs in the U.S., including materials and retail labor, increased 5.2% between April 2024 and April 2025, up from 4.6% the prior year. In California, reconstruction costs were up 1.67% on average from January to April, but the Pacific Palisades region saw a 4.24% increase, according to the report.

Labor costs continue to outpace material costs, Verisk said.

New tariffs are driving up the cost of key construction materials, while recent immigration policies could affect construction costs, Verisk said.

A total of 1.06 million claims were processed in the quarter, down from 1.14 million in the prior-year period despite significant weather events in several regions, the report said.

Texas led in total claim volume, with claims stemming from wind and hail events making up 95% of the state’s catastrophe claims and 72% of all claims, Verisk’s report said. California was far behind in second place, with catastrophe claims from fire, wind and smoke losses making up 33% of first-quarter claims and non-catastrophe water claims accounting for 29%.