A derecho tore through the US Midwest on August 11, killing at least two people and knocking out power to nearly one million customers across Illinois, Indiana, Ohio, and Kentucky. Flood warnings run through Friday. With the Ohio Valley's ground already saturated, the claims picture extends well beyond the storm itself.
For brokers, the central problem is not the wind damage. Standard homeowners' and commercial property policies cover wind and hail losses. Ohio Governor Mike DeWine warned Tuesday that flooding would persist well after the storms cleared. Those losses fall under a separate policy that most clients in the affected states don't carry. FEMA's National Flood Insurance Program (NFIP) covered over 4.5 million policyholders as of December 2025, according to the Congressional Research Service. That number represents a fraction of exposed properties.
Only about 4% of US homeowners carry flood insurance, despite flooding generating billions in annual losses. A 2023 survey by Munich Re and the Insurance Information Institute (Triple-I) found that 64% of homeowners believed their properties were not at risk of flooding. Many of the communities now facing submerged roads across Indiana, Ohio, and Kentucky sit outside federally designated flood hazard zones. The mandatory purchase requirement doesn't apply there. The physical risk clearly does.
The dollar scale of that gap is substantial. A Moody's analysis from May 2026 found that uninsured residential flood losses could exceed $1 trillion in a high-severity scenario. Concentrated risk spreads into inland states, including Illinois, in the more extreme models. A Federal Reserve Bank of Philadelphia study estimated that of approximately $24.4 billion in annual flood damage to US single-family homes, roughly 70% goes uninsured. Triple-I reports that even among homeowners who self-identify as flood-exposed, about 22% have no coverage at all.
The outage scale creates a separate set of questions for commercial clients. Nearly 1 million customers lost power at peak. Cold storage operators, food producers, and manufacturers dependent on continuous power face losses that a standard commercial property policy may not fully address. Whether a policy responds depends on its specific utility service interruption language and the duration of the outage.
DeWine's warning that flooding would persist was not a precaution. The National Weather Service issued a Level 3 of 4 flood threat through early Friday. The zone covers a corridor from the Ohio Valley into parts of Charleston, West Virginia, and eastern Indianapolis. In areas already saturated by earlier rounds this week, an additional six inches of rain could fall within hours.
The Midwest has been accumulating these losses steadily. Severe convective storms have overtaken hurricanes as the largest driver of insured natural catastrophe losses in the US, according to Triple-I. A separate Midwest outbreak in late July was flagged by Aon as a potential top-10 costliest severe weather event in US history. Aon estimated insured losses in the low-to-mid single-digit billions for that event. No official estimate has been released for this week's event.
Home insurance costs across the affected states reflect that pattern. Illinois premiums climbed 48% between 2023 and 2025, according to Insurify data. Indiana and Ohio have seen comparable upward pressure. For brokers placing property risks in these markets, the conversation about flood coverage gaps is no longer a secondary one.
