Addressing Flood Risk in North America
Flooding is the most frequent and one of the most economically damaging natural hazards in the United States. In 2025, riverine flooding accounted for approximately $5.9 billion in expected annual losses across the United States, with the highest losses concentrated in vulnerable counties along major rivers and the Gulf Coast.
Recent events underscore this trend; in April 2025, flash flooding across the Mississippi Valley damaged Kentucky, Tennessee, and Arkansas, while July flooding in Texas's Hill Country caused over $1 billion in damage and a separate event inundated more than 3,100 buildings in Milwaukee weeks later.
For businesses, the impact of flooding extends far beyond direct property damage. Operational disruptions can persist for weeks or months, affecting inventory, logistics networks, site accessibility, and workforce continuity. Flood remains a significant commercial coverage gap in the U.S.: in a 2023 Chubb survey, 84% of brokers reported that most of their clients did not purchase any flood insurance, while 56% said clients avoided buying it because they assumed it was already included in their commercial property policy. Reinvesting savings from a traditional flood program into a parametric layer helps organizations close this gap with fast, transparent liquidity.
How our parametric flood cover works
Descartes offers two parametric flood solutions: Flood-at-Location and River Gauge. Flood-at-Location utilizes on-site sensors installed by third-party experts to precisely assess and measure flood depth in real time. River Gauge utilizes a preselected river gauge (sourced from agencies such as NOAA or USGS) to monitor the water level index. Both products combine historical flood data and advanced risk modeling to price and structure coverage against direct and indirect losses.
Feature | Traditional insurance | Descartes’ parametric |
Claims & loss adjustment | Loss assessed on-site. Subjective, complex, open to dispute. | Triggered by independent third-party data. Objective and transparent. |
Payout timeline | Months, sometimes years, of adjustment. | Days to weeks after the event. |
Use of funds | Usually restricted to repairing physical assets. | Flexible. Covers any financial loss, including non-damage business interruption. |
Coverage | Off-the-shelf, limited room to customize. | Tailored to your exposure and budget. |
Risk period | Annual or long-term agreement. | Flexible: short-term, annual, or long-term. |
Covered Industries
Retail & Conumer Goods
Flooding damages inventory, restricts customer access, and disrupts store operations.
Financial Institutions
Flooding disrupts branch operations, reduces business activity, and delays financial services.
Hospitality
Flooding disrupts guest operations, forces closures, and reduces occupancy and revenue.
Construction
Flooding delays projects, restricts site access, and increases construction costs.
Public Entities
Flooding damages public infrastructure and increases emergency response and recovery costs.
Manufacturing Industry
Flooding damages facilities, disrupts supply chains, and interrupts production operations.
Our case studies are all over the world
Utilizing Machine Learning and real-time monitoring from satellite imagery & IoT, our state-of-the-art technology helps businesses bounce back faster against climate, cyber and other emerging risks.
Where a parametric flood layer fits
Parametric is most powerful as a complement to your existing program. In today’s market, it allows organizations to reinvest premium savings into closing the structural gaps a traditional policy leaves open.
The most common ways clients put it to work:
- Buy down a high deductible: reduce retained exposure following flood events while maintaining access to traditional insurance capacity.
- Top up a sublimit: secure additional protection where flood limits under property programs may be insufficient.
- Cover non-damage business interruption: protect against revenue loss, supply chain disruption, access restrictions, utility outages, and operational downtime caused by flooding.
- Secure immediate liquidity: access rapid funds to support emergency response, cleanup, business continuity, and recovery efforts.
- Wrap an exclusion: address flood-related exposures that may be excluded or only partially covered under traditional insurance policies.
Who it's for
- Retail: protection against inventory losses, site closures, reduced customer access, and prolonged recovery periods.
- Manufacturing: coverage for business interruption, supply chain disruption, and operational downtime following flood events.
- Hospitality: protection against occupancy losses, closures, evacuation impacts, and non-damage business interruption.
- Real estate: cover across commercial portfolios exposed to flood risk.
- Infrastructure: protection for critical assets exposed to flooding, water level fluctuations, and operational disruption.
- Construction: coverage for project delays, site inaccessibility, increased costs, and schedule disruption caused by flooding.
Parametric coverage in 4 steps
Assess
Assess and evaluate flood exposure using river data, rainfall information, flood models, and third-party sensor data.
Customize
Design a customized cover with payout structures indexed according to flood depth or river water levels.
Monitor
Monitor insured locations continuously to determine whether a qualifying flood event has occurred.
Payout
Receive a payout within days of reporting a loss, accelerating recovery and restoring operational continuity.
Global Parametric Insurance Specialist
10 countries with offices around the world
20+ perils covered with best-in-class (re)insurers, written on A+ paper
150+ scientific experts: risk modelers, data scientists, and software engineers
$15B+ capacity already deployed through corporate brokers
FAQ
For more information on parametric insurance, triggers, claims processes, coverage structures: Descartes FAQ Hub
Flood-at-Location: How is the payout structure determined?
We analyze historical flood events by using a combination of different data sources and compare them to the client's past events, loss history, if any, and site information (flood counter-measures, topography, infrastructures, etc.). The payout structure is designed to closely match the flood depth with the client’s expected losses. If no loss history is available, we estimate projected losses based on discussions with the broker and client or with expert judgment and proxies from similar cases.
Flood-at-Location: What is the index based on?
The index is based on the maximum flood depth above the ground as measured in feet by the installed sensors at the client’s location.The index is based on the maximum flood depth above the ground as measured in feet by the installed sensors at the client’s location.
Flood-at-Location: What types of damages are covered under a flood parametric policy?
A parametric policy covers any economic loss sustained from a flood event, including but not limited to property damage, business interruption, and extra expenses. There does not have to be direct physical damage to trigger a payout.
Flood-at-Location: What are the advantages of using on-site sensors?
On-site sensors provide an accurate reading of the flood depth at the insured location. This provides high local precision and matches payouts directly to operational impact.
Flood-at-Location: How does the claims process work?
1) The client notifies their broker, Descartes and/or risk carrier of the loss.
2) After the event, we collect the final data from the third party certification agent, who assesses if the intensity of the event has triggered the policy and at what payout level.
3) Using the collected data, we then create an event report stating the maximum monetary amount to be recovered based on the payout structure defined in the client’s policy.
4) After receipt of the event report, the client issues a Declaration of Loss Statement to Descartes and/or the risk carrier.
5) After receipt of the Declaration of Loss Statement, the client receives the payout in agreement with the policy terms, allowing them to accelerate continuity of operations.
Flood-at-Location: How reliable are the on-site sensors used by Descartes?
No-contact sensors, particularly radar-based sensors, are reliable, robust, and are capable of handling adverse conditions with a wide range of water quality. They rely on high-frequency waves to accurately measure the flood depth, which allows them to remain virtually unaffected by temperature, turbulence, and other obstacles.
River Gauge: How are the index and payout structure determined?
We analyze historical events by using the reported water levels at the recommended reference station and correlate the data with any prior losses the insured may have incurred. If there have not been any prior losses, we estimate projected losses during collaborative discussions with the broker and client to determine the strike and exit points of the payout structure.
River Gauge: What is the index based on?
The index is based on the maximum daily water height as measured in meters at the reference station (preselected water gauge). The water level is equal to the maximum water elevation relative to the tidal datum. The tidal datum is the base elevation used as the reference point from which to establish water heights or depths.
River Gauge: What types of damages are covered under a flood parametric policy?
A parametric policy covers any economic loss sustained from a triggering event, including but not limited to property damage, business interruption, and extra expenses. There does not have to be direct physical damage to trigger coverage.
River Gauge: How does the claims process work?
1) The client notifies their broker, Descartes and/or risk carrier of the loss.
2) After the event, we collect the final data from the certification agent, ensuring the most accurate level of information to assess if the intensity of the event has triggered the policy and to what payout threshold.
3) Using the collected data, we then create an event report stating the maximum monetary amount to be recovered based on the structure outlined in the client’s policy.
4) After receipt of the event report, the client will issue a Declaration of Loss Statement to Descartes and/or the risk carrier.
5) As defined within the policy, after receipt of the Declaration of Loss Statement, the client will receive the payout in agreement with the policy terms, allowing them to accelerate continuity of operations.
River Gauge: How is the data source determined?
In most cases, we rely on publicly available data published by sources such as the National Oceanic and Atmospheric Administration (NOAA) and the United States Geological Survey (USGS). We source most river gauge data from these sources or state government sources, when needed. Following a triggering flood event, we commission an independent third-party agent that will certify the data and water level index to determine if the client is entitled to a payout.
Contact Us
Whether you're quoting a complex risk, looking to break into new markets, or just curious about parametric insurance, our team is here to help you win. Reach out and we will get back to you within 48 hours.
