Navigating the Storm: Eastern Midwest Insurance Trends Amid Weather Challenges

The eastern Midwest, comprising Illinois, Indiana, and Ohio, is known for being the heart of our country, and for good reason: it is celebrated for its rich agricultural heritage, friendly communities, sports teams, world-class universities, and vibrant urban centers like Indianapolis, Columbus, and Chicago. From packed stadiums to the stunning shores of Lake Michigan, the Midwest offers a blend of cultural experiences, including renowned museums, diverse culinary scenes with Michelin-starred restaurants, and lively festivals. With a relatively affordable cost of living, a slower pace of life, a range of outdoor activities, and a strong sense of community, the eastern Midwest is one of the most welcoming places in the country to live and raise a family.

Torrent of tornadoes, cyclones, floods, and winter storms barrage through

Though once thought of as a part of the country where “nothing happens,” recent years have proven that idiom to be false, with a barrage of extreme weather events barreling through Illinois, Indiana, and Ohio. In the last three years alone, they have experienced 73 so-called “billion-dollar disasters” causing potential damages between $12 billion and $25 billion. This includes a few tropical cyclones whose remnants impacted the Midwest, such as Hurricane Beryl, Hurricane Helene, and Hurricane Debby in 2024.

Severe weather events have ticked up across the eastern Midwest in the past five years, with notable attention to severe storms, derechos, flooding, and winter storms.

• Severe storms: In 2024, Illinois was hit with nine severe storms, Indiana with six, and Ohio with eight. In May 2024, a multi-day tornado outbreak produced more than 165 tornadoes, causing an estimated $6.6 billion in cost-adjusted damages. Among the most impacted states were Indiana and Ohio, which saw widespread damage to homes, businesses, vehicles, agriculture and other infrastructure. Another $6 billion-plus severe storm hit Illinois, Indiana and Ohio in March 2024, with hail, high winds, and dozens of tornadoes. Another notable severe storm last year occurred in July, and broke the Chicago-area record for the most tornadoes in a day—32.
• Derechos: Derechos are clusters of thunderstorms that often have high winds and can leave customers without power while causing damage to homes and infrastructure. In 2020, a derecho swept across the eastern Midwest and resulted in $11.5 billion in damages, with gusts over 140 mph. Illinois, Indiana, and Ohio average one derecho per year for each state.
• Flooding: In 2023, Illinois and Ohio reported severe flooding and up to eight inches of rain within a 24-hour period. That event caused over $2 billion in damage to Illinois, Ohio, and other impacted states. Indiana has seen an average annual precipitation increase by 15% (a fourfold increase per decade), and this trend of more rain falling in heavy downpours is predicted to continue.
• Winter storms: Illinois experienced a long-duration cold event in January 2024 that produced sleet, bitter cold winds and freezing rain, causing $1.4 billion in cost-adjusted damages. Indiana and Ohio last experienced severe winter storms in 2022. These events may decrease given climate predictions for the region, which is expected to warm.

Across the board, these states have been getting warmer, and that trend is expected to continue. It could cause fewer extreme cold days and fewer severe winter storms. However, the eastern Midwest is also predicted to see more extreme precipitation, which will cause more frequent and intense flooding in spring and in urban areas. “More heavy downpours may increase the likelihood of property damage, travel delays, and disruption in services,” according to the Environmental Protection Agency (EPA).

Even if you are not in a high-risk flood zone, flood insurance is something everyone should consider. There is an increasing number of insurers that can add flood coverage to home insurance policies or private flood insurance insurers, offering broader coverage than is available through the National Flood Insurance Program.

Insurers face profit declines, shift rising costs to consumers

In the eastern Midwest, profitability has been elusive for insurers. For insurers to be profitable, their expenses and claims must be less than the percentage of profits they take from insurance premiums. If they are not profitable, they are paying out more than what they are receiving from customers premiums.  Illinois insurers have only profited during three years between 2017 and 2023, likely due to extreme storms and climatic events. Profitability has declined from 2013 to 2023 in Indiana, and the state posted its first loss in 2023. Throughout Ohio, insurers have gone from making money on home insurance policies from 2013 to 2021 to losing profits in 2022 and 2023

As insurers recognized the increase in billion-dollar disasters, they passed those rate increases on to consumers. This doesn’t just apply to homeowners; it also impacts personal auto policies. In Illinois, rates increased by 56.9%, Indiana’s by 36.3%, and Ohio experienced a 32.1% increase from 2019 to 2024, according to a S&P Global Market Intelligence Still, even with these increases, this region of the country has moderate to low rates. Ohio has some of the lowest auto rates compared to the rest of the country. However, rates are expected to rise by another 3.5% this year. That is a small predicted increase, however in previous years, the state saw increases of 16.5% and 12% in 2024 and 2023. While that is a small predicted increase, in previous years, the state saw increases of 16.5% and 12% in 2024 and 2023. 

In addition to rate increases, there are new trends regarding depreciation schedules based on the age of the roof, as well as separate wind and hail deductibles for homeowners’ policies in the eastern Midwest. Separate wind and hail deductibles are becoming the new normal, typically calculated as a percentage of the dwelling coverage. For example, 2% on a $2 million home results in a $40,000 wind/hail deductible. Insurers are adding depreciation schedules to the policy that determine the actual cash value for damages at the time of loss, rather than paying full replacement cost regardless of the age of the roof, as they have always done in the past.
 

Risk mitigation for homeowners in the eastern Midwest

Homeowners in Illinois, Indiana, and Ohio should take proactive steps to protect their properties from high-wind events, tornadoes, derechos, flooding, and winter storms. These weather challenges are becoming more frequent, and insurers are adjusting policies accordingly. Implementing the following retrofits and mitigation strategies can help reduce damage risks and potentially improve insurability. General risk mitigation considerations are:

• Whole-house backup generator: Installing a whole-house backup generator ensures critical systems remain operational during power outages. Make sure the generator supports the alarm and security systems, heating/cooling system, refrigerator and freezer, and entry gate (if applicable).
• Lightning protection: Since lightning strikes are common in the eastern Midwest, adding a lightning rod can help prevent electrical surges, fires, and structural damage.
• Low-temperature monitoring to prevent pipe freezing: Using low-temperature monitoring products can alert homeowners before temperatures drop to freezing levels, reducing the risk of burst pipes and water damage.
• Impact-resistant roofs: Upgrading to a Class 4 impact-resistant roof or synthetic product recommended by IBHS can reduce damage during hail events, which are prevalent in the Midwest. Many insurance carriers offer rate reductions for homes with Class 4-rated roofs Additionally, impact resistant roofing  products are quickly becoming the standard in hail prone areas.
• Maintaining debris-free gutters: Regularly cleaning and maintaining gutters ensures proper water drainage, preventing foundation issues, basement flooding, and ice dam formation in the winter.
• Wind-rated garage doors: Installing a wind-rated garage door helps protect the home from high winds and tornado-related damage, reducing the chances of structural compromise.
• Enhanced roof design with aerodynamic shaping: Homeowners should consider a hip roof design, which has a more aerodynamic shape and is proven to reduce wind uplift forces. Compared to traditional gable roofs, hip roofs allow wind to flow more smoothly over the structure, lowering the risk of roof failure in extreme weather conditions. If that is not possible, strapping or using “Ring-shank nails” nearly doubles the strength of your roof against the force of winds. 
• Gable-end bracing: Gable-ends can be a weak link in a high-wind event. Bracing gable-ends fixes that problem and stops wind from collapsing that section of the home.
• IBHS FORTIFIED roof program: This program focuses on enhancing the roof’s strength, durability, and ability to prevent water intrusion. Key features of an IBHS  FORTIFIED roof include a sealed roof deck, stronger fasteners, edge protection, impact-resistant roof materials (Class 4), and durable flashing/venting materials.
• Floodproofing in high-risk areas: Homeowners in flood-prone areas can implement passive flood prevention measures by improving property drainage with French drains, backflow valves, exterior grading, sealing foundation walls with water-resistant materials, and installing interior sump pumps with battery backup to prevent basement flooding. These floodproofing measures can help protect a home. Learn more.

Illinois leads the way in addressing insurance challenges

Introduced in 2025, Senate Bill 268 in Illinois, also called the Insurance Rate Fairness and Consumer Protection Act, “provides that insurers must submit a request for approval to the Department of Insurance for any proposed rate increase for homeowners insurance premiums or automobile insurance premiums.” It also requires insures to seek written approval from the department for any rate increase. It also states that “nondriving factors,” such as credit score, cannot be used to determine automobile insurance premiums and similarly for homeowners insurance, states that factors unrelated to “the insured property's location, age, and condition” cannot be used in setting the rate.

Additionally, a new 2025 code update is now in effect. This legislation brings greater awareness to coverage for sewer backups and sump pump overflows—two common but often overlooked risks. The state code has been updated, and now insurers must explicitly disclose whether a homeowners’ policy includes coverage for these types of damage when issuing or quoting a policy. If the policy does not provide such coverage, insurers are required to offer homeowners the option to purchase coverage. 

Indiana and Ohio have not had recent insurance legislation of note.

Work with an experienced broker

Extreme weather events are no longer rare anomalies; they are a growing reality for homeowners across the eastern Midwest. Clients navigating the complexities of homeownership can benefit from the guidance of a professional insurance advisor. These advisors collaborate with multiple insurance companies, offering valuable counsel and individualized advocacy. Whether you are purchasing a new home or seeking alternative coverage following a nonrenewal, consider scheduling an insurance review with a personal risk advisor. This consultation will provide you with tailored advice, empowering you to make informed decisions about your insurance coverage.