Getting the right extreme-weather property insurance for clients in U.S. coastal states

Explore the challenges faced by MGAs and coverholders in protecting commercial property against hurricane, flood and hail risks – and how Costero’s In-House Property Binder and Deductible Buy-Down solutions can help.

If you’re an MGA, insurer, broker or coverholder serving commercial clients along the U.S. Atlantic or Gulf coasts, you know how hard it’s become to secure the right property cover for your clients, at the right terms. Billion-dollar natural disasters are more frequent; deductibles keep creeping up; and properties in different states can have wildly different risk profiles.

In this article, we outline the exposures you’re wrestling with, highlight recent events underscoring the risk, and explain how working with an expert partner like Costero Brokers can help you respond quickly and confidently for your clients – with our In-House Property Binder and Deductible Buy-Down solutions.

The realities of extreme weather exposure for U.S. coastal states

The sheer concentration of people and property along the U.S. Atlantic and Gulf shoreline makes coastal losses uniquely impactful. U.S. coastal counties are home to roughly 40% of the nation’s population, despite representing less than 10% of contiguous U.S. land area. (Source: U.S. National Oceanic and Atmospheric Administration – NOAA) That concentration amplifies the consequences when wind, hail and flood strike.

Across Louisiana, Mississippi, Alabama, Georgia, Florida, Pennsylvania, Texas, New Jersey and New York, the peril mix varies: Gulf states may face more hurricanes and tropical remnants, while Atlantic states face ocean storm surges and nor’easters. And all of these states can suffer disastrous floods, and severe convective storms that drive costly hail and straight-line wind claims.

Recent events underline the scale of extreme weather risk

NOAA’s Billion-Dollar Disasters database shows how frequently these hazards now translate into multi-billion-dollar economic shocks. In 2024, the U.S. suffered 27 separate billion-dollar weather and climate events – the second-highest count on record.

The July 2025 Central Texas floods were a stark reminder that catastrophic events in coastal states are not confined to the immediate coastline. As of late July, media and official tallies reported at least 135 fatalities across multiple counties, with damage to tens of thousands of homes and businesses. The human impact was devastating; the economic impact will echo for years. (Source: Forbes)

From an insurance perspective, several early assessments point to a large gap between total economic losses and insured losses. Analytics firm Cotality estimated about $1.1 billion in damage to residential buildings and roughly $135 million in potential claims to the National Flood Insurance Program (NFIP). Reinsurer Aon highlighted that low flood insurance take-up in the hard-hit rural areas would likely limit industry-wide insured losses, even as total economic losses run into the billions. Other sources pegged overall damage (economic, not insured) in the $18–22 billion range. The signal is clear: extreme weather risks such as floods remain dramatically under-insured, and percentage deductibles are leaving many policyholders to carry significant costs on catastrophe claims.(Sources: Insurance Journal, Reinsurance News)

Finding the right property cover for coastal states is challenging

If your clients own commercial property in U.S. coastal states, risk and insurance complexity increase:

• High catastrophe deductibles: Many coastal policies carry percentage deductibles (hurricane, named storm or wind/hail) that can run to several points of Total insurable value (TIV) – materially higher than standard all-perils deductibles. That’s a rational market response to volatility, but it also leaves insureds with significant retained loss on exactly the claims they’re most likely to have.
• Coverage patchiness – especially for flood: The Texas floods once again showed how low insurance take-up in many communities leaves a protection gap that becomes a liquidity crisis after an extreme weather event. Even where NFIP or private-market flood is purchased, deductibles can still be steep.
• Timing and execution risk: In a fast-moving market, you need speed to bind opportunities and retain accounts. Those that can assess and respond quickly win the business; those that can’t, don’t.

Advantages of working with an extreme weather expert in the London market

Working with a Lloyd’s of London market specialist for extreme weather coverage gives you breadth of market and depth of expertise in one place. In 2025, reinsurer appetite has improved, cat-bond and alternative capital issuance are high, and capacity is broadly competitive – yet outcomes still vary by risk quality and how the programme is presented. A partner who understands both U.S. coastal realities and London capacity can shape market interest, structure solutions around hotspots, and accelerate turnaround on quotes.

That’s why working with Costero Brokers makes such a difference to so many leading U.S. MGAs, insurers, brokers and coverholders. Our coastal property team places business directly with Lloyd’s of London syndicates, provides rapid (typically under 24-hour) turnaround on quotes, and brings capacity across U.S. coastal states – with a pragmatic willingness to look at commercial risks within typical coastal proximities. We work through U.S. licensed wholesalers and retailers and focus on solutions that are clear, quick and service-led.

Swift certainty with Costero’s In-House Property Binder

Our In-House Property Binder solution gives you a streamlined route to all-risks and wind-only solutions supported 100% at Lloyd’s of London. In a market where timing matters, having an in-house facility helps you quote and bind quickly, create consistency across a schedule, and access meaningful coastal capacity without having to assemble a new line-up for every placement. For your clients, that can translate into fewer friction points, clearer terms, and a smoother experience.

Because the binder is operated by a team that lives and breathes coastal property, you also get real-world underwriting dialogue: we understand construction class, ROOF age, proximity to water, secondary protections and the other drivers that move the needle with capacity providers. And speedy turnaround of quotes is central to the design of our solution.

Making deductibles manageable with our Deductible Buy-Down solution

Rising catastrophe deductibles will naturally be a pain point for many of your clients. A Deductible Buy-Down lets you reduce that retained loss for defined perils, improving liquidity right when it’s needed most.

Costero’s Deductible Buy-Down facility has operated for years in the U.S. market, supporting buy-downs for wind, hail, flood, earthquake and more. It’s a straightforward indemnity solution that does exactly what it says on the tin – when the peril hits and the base policy responds, the buy-down steps in to shrink the client’s out-of-pocket costs.

Our Deductible Buy-Down solution brings major benefits for your clients and your relationship with them:

• Protect client EBITDA and cash flow: A lower deductible for your client’s extreme weather claim can turn a balance-sheet shock into a manageable hit – especially important for businesses in hurricane belts or hail corridors.
• Support account retention: Giving clients a choice on deductible structure helps you keep the account when base-market terms harden.
• Complement base cover: You can pair a competitively priced base policy (with a higher cat deductible) and then use the buy-down to restore affordability and resilience.
• Capacity in all U.S. States (including Hawaii), from single location to multi state schedules, and most occupancies are considered.

We’re ready to help meet your extreme weather cover challenges

Tell us about your client’s property and we’ll turnaround a quote quickly, working with your preferred wholesale partners. For complex schedules, we can help structure a clear, cohesive placement strategy and layer in a Deductible Buy-Down where it adds the most value. Our aim is simple: strong cover, fast decisions, no drama.

If you’re placing or renewing coastal property this season – particularly along the Gulf and Atlantic seaboard – let’s talk. Reach out to discuss how Costero’s In-House Property Binder and Deductible Buy-Down can help you deliver stronger outcomes for your clients in coastal states.

To learn more about how we can help you navigate the challenges of extreme weather cover, get in touch with our expert, Rob Withers at Costero Brokers.