Out of sight, out of mind?
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No longer just a coastal concern, flood risk is spreading across the US and demands greater attention
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Flood risk is no longer an issue only for individuals living on the United States coastline – it’s now a nationwide fear. As flash floods continue to devastate Indiana and the Midwest, the US has seen its fair share of water-related disasters so far in 2026. Over the last month alone, states across the country – including Alaska, Missouri, New Jersey, and New York – have experienced exceptionally high rainfall triggering dangerous flood events.
The nature of commercial flood risk is changing, becoming more commonplace yet simultaneously less predictable, which means assessing traditional flood zones is no longer enough to determine the true exposure of a business. And it’s a worrying outlook for organizations that view flood insurance as curative rather than preventative.
“Flood events are becoming more frequent and more widespread across the United States,” explained Carson Post, national underwriting director, flood at ICW Specialty. “And at the same time, flood risk has become more complex, with both pluvial and fluvial flooding occurring more often. The severity of these events, along with the time required for communities and businesses to recover, has also risen.”
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“The biggest mistake people make is assuming that if [their] business isn’t in one of FEMA’s high-hazard zones, then [their] risk of flooding is minimal”
Carson Post,
ICW Specialty
And many factors play into these changes, such as increasing development in flood-exposed areas, deteriorating or outdated stormwater infrastructure, urbanization and even hard-paved surfaces that essentially create more water runoff.
Outdated FEMA flood maps “These are issues that traditional flood zones don’t always take into consideration, along with the fact that many of the Federal Emergency Management Agency (FEMA) flood maps are outdated by more than 15 years,” said Post.
This is where one of the biggest misconceptions around flood insurance comes in – relying on outdated and inaccurate data. As Post told Insurance Business, defaulting to FEMA flood zones and the FEMA flood data and thinking that this is up to date is dangerous.
“The biggest mistake people make is assuming that if [their] business isn’t in one of FEMA’s high-hazard zones then [their] risk of flooding is minimal, and that [they], therefore don’t need to purchase any flood coverage,” he added. “Or, if they do purchase coverage, they don’t buy nearly enough to protect their business.”
Published Sep 21, 2026
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“Private flood insurers are in a better position to be able to offer more tailored flood solutions specific to an insured’s needs and risk tolerance”
Carson Post,
ICW Specialty
Take, for instance, the 2025 Central Texas floods, or the heavy rainfall in Asheville from Storm Helene in 2024. Both are examples of devastating flood losses occurring in areas no one would have thought of as exposed.
“As these unfortunate events happen and as they attract more media attention, the public is becoming aware that their properties might be more exposed than they previously thought,” said Post. “That’s triggering people to rethink how much flood insurance is enough to protect their businesses. However, most of the time it’s not front of mind – if it’s not in the news or on TV then it’s ‘out of sight, out of mind.’”
More investments, better technology With more media scrutiny pointed at flood events, public attention has been shifting away from traditional, often vague, flood insurance to more specialized, private coverage. As Post told Insurance Business, this growing interest has been sparked by a historically underserved market.
“Many insureds really only know about the National Flood Insurance Program (NFIP) as their main option for flood insurance,” he said. “With the devastating events currently in the news, the private flood insurers want to make sure they’re there to help the public have more tailored options that fit their business needs.”
He explained, “Private flood insurers can also invest a lot more in technology and predictive modeling to get a more accurate picture of a business’s flood exposure. [This, in turn, goes] way beyond what traditional FEMA flood zones are telling us, too.”
And, with private flood insurance, customers enjoy better, more flexible coverage with higher limits compared to what the NFIP is able to offer.
“Even simple things, such as offering replacement cost coverage rather than actual cash value, or being able to provide business income coverage,” added Post. “There are many other coverage enhancements as well, such as building ordinance and law. For instance, if a business has multiple buildings that they own, private flood insurers can put them all under one policy, whereas the NFIP has to put them all on individual policies per building. Meaning, from an administrative perspective, that’s an easy fix.
“Also, I believe that the private flood insurers have a better leg to stand on regarding the investments they can make in ensuring the flood exposure is more accurate and up to date with what is changing, mainly through technology and predictive modeling.”
This is an area where ICW Specialty takes a best-in-class approach. Investments in the latest innovative technology and tools mean that their predictive modeling is getting better every year, outpacing what the traditional flood insurance market can offer.
Deeper conversations between brokers and insureds Brokers in the US, as Post told Insurance Business, need to play their own part in changing commercial client conversations to help them understand the real benefits that private coverage can offer. And that begins with highlighting the insured’s loss of income exposure.
Post explained, “In addition to somebody’s loss of income from direct physical loss to their property, people should also be thinking about issues like reduced access to their properties post-loss, how that impacts their rebuild time, how quickly contractors can get in and actually rebuild the property and what the potential loss of income is.
“All of these questions come into play. And so, those conversations between insureds and brokers should be about assessing their business and making sure the business income values they report to the private insurance companies are really their annualized values. It really needs to be an accurate picture of what their potential exposure is on an annualized basis to make sure they’re adequately covered in the event of a devastating loss.”
Another often-overlooked conversation is the importance of accurately reporting insurable values to maximize the benefits of replacement cost coverage. This includes inventory and stock values, but perhaps most critically, accurate building valuations.
“Considering inflation and rising building and labor costs, insureds and brokers need to make sure they’re diligent in seeing the values increasing year over year. Because as these costs increase, and with the growing frequency and severity of flood losses that you see, you don’t want to be caught in a situation where you’re underinsured in the event of a large loss. That’s something which could be prevented by just making sure that you’re diligent and you’re staying on top of inflation.”
More frequent events, worse damages Looking to what the future holds for private flood coverage, Post is optimistic about the months and years to come. As flood exposures increase, so too do private insurers’ abilities to predict and prepare for disasters.
“We know that the traditional flood zones don’t always give an accurate picture of what your true flood risk is,” added Post. “While these events are happening more frequently, the damages are also getting worse. And I believe that private flood insurers are more equipped to handle this – they’re more equipped to invest in technology
and predictive modeling to get access to more accurate pictures of what somebody’s true flood exposure is.”
But private flood coverage goes beyond just the added bells and whistles. The private market allows for a much more consultative approach with both brokers and insureds, providing expert guidance and recommendations on how to make properties more resilient to damage. It’s this preventative rather than curative process that sets this market apart from its traditional counterparts.
“Private flood insurers are in a better position to be able to offer more tailored flood solutions specific to an insured’s needs and risk tolerance,” said Post. “The options available to the insureds through the private flood insurance market are much more vast in terms of how much coverage they can actually buy, the different deductible structures, and the coverage enhancements on offer.”
There’s also the element of an insured’s risk tolerance. While some insureds may want or even expect lower deductibles, they also want the greater coverage enhancements that private insurers can provide that the NFIP may not.
“And, at the same time, there may be companies with a higher risk tolerance for it, and they just want to be able to purchase more flood limits to make sure that they have enough coverage across multiple properties,” added Post. “Their risk tolerance is higher, and therefore they may be okay with much higher deductibles in order to ensure they keep their costs down from a premium perspective.”
Couple all of these offers and options with that intrinsic consultative approach, and private flood insurers are perfectly positioned to help commercial clients in 2026. As flood damage and natural disasters appear to be on the rise, and the financial impact of these events continues to grow, there’s no time like the present to fully protect the future of a business.
“With the private market, it’s a greater asset to everybody that more people are willing to provide the coverage,” explained Post. “There are more options for insureds, not only from different private flood insurers, but also different products and solutions that they can buy to help their business needs. It’s all about making sure their flood risk is more up to date with what we’re seeing in the country so far.”
July 2025 Central Texas floods:
A breakdown of losses
An estimated $18 billion to $22 billion in total economic damage covering property, infrastructure, and business interruption
Modeled at roughly $1.1 billion specifically for residential properties
Roughly 3,000 businesses and thousands of homes were damaged or destroyed, particularly along the upper Guadalupe River basin in Kerr County
Sources: Cotality, Captives Insurance, Texas Public Radio
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