1. The Big Picture
2. Claims and Catastrophe Trends
3. Pricing, Labor, and Materials
4. Final Remarks and Things to Watch

Key takeaways include:

The Big Picture

• Q1 2026 shows pricing starting to normalize. Claims volume is down, but severity remains high, which means restorers may see fewer claims while still managing complex and often larger losses.
• Carriers and large contractors are seeing more stable pricing, but the mix of work continues to shift. Labor pressures, weather volatility, and more selective job opportunities continue to shape the market.

Claims & Catastrophe Trends

• U.S. property claim volume declined, largely because no hurricanes made landfall in the U.S. in 2025. Higher deductibles and non-recoverable depreciation may also discourage some policyholders from filing claims, while localized winter and wind events continue to create losses.
• Water remains the largest loss driver, while ice and snow losses increased as winter storms impacted areas that don’t typically experience them. Restorers should prepare beyond traditional storm regions and consider how cold-weather water losses could impact their markets.
• These events may point to a broader shift in weather patterns. Restorers are seeing more frequent and severe losses in areas that historically experienced less CAT activity.
• Contractors can differentiate themselves through rapid response, multi-peril mitigation capabilities, strong documentation, and relationships with carriers and homeowners that position them as a trusted resource when losses happen.

Pricing, Labor & Materials

• Reconstruction pricing has stabilized compared with recent years, but contractors still need to watch fuel costs, labor availability, and broader construction market conditions. Changes in any of these areas can quickly increase project costs.
• Labor shortages continue to challenge restorers, especially when it comes to recruiting, training, and retaining skilled workers. Certain trades continue to feel even greater pressure as demand increases.
• Lumber prices have eased, but overall rebuild costs continue to rise as labor, fuel, and other material costs remain elevated. Lumber is only one piece of the total reconstruction cost.

Things to Watch

• Susan and Greg each shared three metrics they believe restorers should keep an eye on.
• Susan recommends watching claims volume, regional and weather patterns, and loss severity. Greg recommends monitoring fuel costs, new construction and remodeling activity, and broader business and economic spending trends. Together, these indicators can help restorers understand where demand, pricing, and risk may be headed.