The numbers
Verisk’s latest quarterly property report, released the week of September 22, 2026, describes a market splitting in two. U.S. property claim assignments fell to 1.24 million in Q2 2026 — the lowest second-quarter level in recent years, down 12.21% from Q2 2025 and 13.05% below the five-year average, extending a four-year decline.
At the same time, Verisk says “average severity is tracking toward the highest quarterly level in recent years.” In the report’s own framing: “Property and reconstruction spend is consolidating into fewer, higher cost claims.”
Fewer claims. Bigger tickets. That’s the whole story — and the details underneath it are what matter for your shop.
The thinning is uneven — and it’s the everyday work that’s vanishing
The volume decline is concentrated almost entirely in non-catastrophe claims. Measured against the five-year average, non-CAT assignments fell 18.65% while CAT assignments slipped just 4.29%. The number of PCS-designated catastrophe events held steady — but CAT claims now account for 43% of Q2 volume, up from 34% five years ago.
Verisk’s summary line: “Routine, everyday claim activity is thinning out, while catastrophe-driven activity is holding.”
For a restoration contractor, that sentence is the quarter in miniature. The small water loss, the routine claim, the bread-and-butter volume work — that’s what’s thinning. What’s holding is storm-driven work. The business is increasingly defined by catastrophe, which means surge capacity, storm response, and CAT-readiness matter more than steady-state marketing.
Severity: watch where this number goes
Current reported average severity for Q2 sits at $17,085 — down 10.77% from Q2 2025, but only 2.88% below the five-year average. That number will move, and history says it moves up.
The precedent is Q1 2026: initially reported at $16,079, it has since matured 13.1% to $18,185 — exceeding the projection Verisk published last quarter. Apply a standard historical maturation rate to Q2 and you land near $18,794. Apply the stronger rate Q1 actually followed and Q2 pushes above $19,400 — which would make it the highest quarterly average severity in recent years.
The operator takeaway: claims get more expensive as they develop. Initial estimates understate final cost by double digits. Scope it right the first time, and run your supplement discipline like it’s the margin — because on bigger tickets, it is.
Your costs are rising too — and accelerating
Combined U.S. labor and material costs rose 4% year-on-year in Q2, and Verisk notes these costs accelerated in every month of the quarter, with labor called out specifically.
So both sides of your P&L are moving against you at once: the volume of available work is thinning while your cost to do each job climbs. Carriers feel the same squeeze from their side, which brings us to the part that affects your estimates directly.
Carriers are walking into reserving season — expect a fight on every line
Verisk spells out the carrier position plainly: “lower claim counts, a CAT heavier mix, and increasing severities are colliding with rising unit costs, especially labor, right as they finalize second half reserving, reinsurance, and vendor strategies.”
Read that as a contractor: carriers are heading into the fall with fewer claims and rising per-claim costs, and vendor negotiations are where they’ll try to claw margin back. Every line item you write this fall will be scrutinized by someone whose own numbers are under pressure. This is the season where documentation discipline is the difference between getting paid and getting ground down — photos, moisture logs, line-item notes, and pricing feedback that holds up.
It’s also the same season RIA is pushing Verisk’s Xactware pricing team on material-handling line items and the “Large Restoration/Remodel” labor tier that cut labor pricing 5–10%. The pricing fight and the severity data are the same story told from two sides.
The Midwest is the hotspot
Verisk flagged the Midwest as Q2’s surge region: Illinois and Ohio saw assignment-volume surges driven by severe convective storms and significantly higher hail activity, while Kansas claim volume jumped 73% and Iowa jumped 95%.
For storm-chasing operators, that’s a map. For everyone else, it’s a reminder that with volume concentrating in CAT events, being positioned — crews, equipment, carrier relationships — near where the weather actually hits is increasingly the business model.
What to do with this
- Stop budgeting on small-job flow. Non-CAT volume is down nearly a fifth from the five-year norm. If your forecast assumes the everyday work comes back, rework the forecast.
- Get CAT-ready, not just CAT-curious. 43% of claim volume is catastrophe-driven. Surge capacity — on-call crews, equipment staged, carrier program relationships current — is the growth lever now.
- Document like every line item will be fought. Carriers are under reserving pressure; adjusters will push. Photos, readings, timestamps, and clear estimate notes are your leverage.
- Price with today’s costs, not last year’s. Labor and materials up 4% and accelerating monthly. Stale price lists and old templates quietly eat your margin on every job.
- Scope it right the first time. Claims mature upward — Q1 grew 13.1% from first report to maturity. An accurate initial scope with disciplined supplements beats a thin estimate that bleeds.
- Watch the Midwest. IL, OH, KS, IA surged in Q2. If you chase storms, that’s your near-term board; if you don’t, that’s where the capacity crunch — and the pricing pressure — will show up first.
Restoration Intel is an operator publication for the restoration trade. Informational only — not legal or coverage advice. When a claim is disputed, the policy language and the documented facts decide it.