Midwest Spring Storms: A Season of Challenges for Businesses and Insurance

Published in All Insurance Industry Insights on Monday, June 9, 2025 by Jay Schares

Spring 2025 has brought relentless weather across the Midwest, with powerful storms disrupting communities and businesses alike. Tornado outbreaks, severe thunderstorms, and widespread flooding have caused extensive damage to commercial properties, creating new challenges for insurance coverage and rising costs.

From April 26–28, a devastating tornado outbreak swept through Nebraska, Iowa, Kansas, and Missouri, leaving significant destruction in its path. More than 140 tornadoes touched down, damaging homes, businesses, and infrastructure. The presence of La Niña has fueled increased storm activity, intensifying the risk of property damage across the region.

And the turbulence didn’t stop there. In mid-May, the Central U.S. endured a multiday severe storm outbreak that caused an estimated $9 billion to $11 billion in total damages and economic losses, according to AccuWeather. High winds, flooding, and hail forced many businesses to temporarily shut down and reevaluate their risk management strategies

The Rising Cost of Commercial Insurance

As natural disasters grow more frequent and severe, commercial insurance rates are continuing to rise. Some businesses have seen premiums increase by as much as 50% over the past five years. Insurers, facing record underwriting losses, are tightening coverage terms and reassessing risk models. That’s left many business owners struggling to find affordable policies—while others are facing stricter deductibles and more exclusions related to storm damage.

Percentage deductibles for severe storm perils are becoming more common in high-risk areas, raising concern about how businesses will handle the financial burden of future weather events. The upcoming reinsurance renewals will play a key role in shaping the commercial insurance market and determining what coverage options will look like going forward.

How Businesses Can Prepare:

With commercial insurance becoming more complex and costly, Midwest businesses need to take proactive steps to protect their assets. Experts recommend:

• Reviewing current insurance policies to fully understand coverage limits and exclusions.
• Investing in storm-resistant infrastructure like reinforced roofing or improved drainage systems to help minimize damage.
• Comparing quotes and exploring alternative insurance providers for competitive pricing and terms.
• Staying informed about regulatory updates that could affect coverage or pricing.

As Midwest weather continues to bring uncertainty, the businesses that plan ahead will be in the best position to weather the storm—both financially and operationally.

If you have any questions or need further clarification, please contact Jay at 319-234-8888 or jschares@pdcm.com

Written by
Jay Schares