Indiana orders a 60-day cancellation moratorium after the August derecho
Indiana orders a 60-day cancellation moratorium after the August derecho
2026-09-10 · Indiana · Regulation
What happened. The Indiana Department of Insurance issued Bulletin 280 on 17 August 2026, directing insurers to hold off on cancelling policies belonging to Hoosiers caught in the storms that began on 11 August. It is signed by Insurance Commissioner Holly W. Lambert.1
The operative sentence directs:
“A 60-day moratorium for cancellation of any insurance policy in effect for any policyholder directly affected by the Disaster Events residing within the State of Indiana, and a suspension of any penalty attached to the late payment therein.”
The dates, precisely
These are easy to get wrong, and the bulletin's own framing differs from how it has been summarised elsewhere.
- The storms began 11 August 2026 and continued through 16 August.
- Executive Order 26-21, declaring a statewide disaster emergency, was issued by Governor Braun on 13 August — two days into the event, not on its first day.
- The moratorium takes effect on the date the bulletin issued, 17 August: “This moratorium will take effect on the date of issuance of this Bulletin.”
- Insurers are expected to apply it retroactively to 10 August — the bulletin asks them to reach back to “the day before the Disaster Events occurred,” which is 10 August, not 11 August.
- Sixty days from issuance runs to roughly 16 October 2026.
Scope is statewide, not limited to declared counties — the test in the bulletin is whether a policyholder was “directly affected,” and where they reside is Indiana generally.
The storm behind it
Indiana Homeland Security describes the 11 August system as “a thunderstorm system, preliminarily classified by the Storm Prediction Center as a derecho,” which “produced extreme straight-line winds, at least two tornadoes, large hail and flash flooding.” At its peak Indiana had “more than 300,000 power outages.”3
A federal major disaster declaration, DR-4933-IN, followed on 25 August. Individual Assistance covers 21 counties: Carroll, Dearborn, Decatur, Delaware, Fayette, Franklin, Hamilton, Hancock, Henry, Lake, LaPorte, Madison, Marion, Morgan, Porter, Pulaski, Randolph, Rush, Tipton, Union and Wayne. Public Assistance — which reaches local governments and certain private nonprofit organisations — covers eleven of those: Delaware, Fayette, Franklin, Hamilton, Henry, Lake, LaPorte, Madison, Porter, Tipton and Wayne.4
What the moratorium does not do
Three limits, all of which matter to an association treasurer looking at a master policy.
It suspends cancellation, not premium. The bulletin suspends “any penalty attached to the late payment,” which is not the same as forgiving the payment. Premium continues to accrue and will be owed when the sixty days run out. An association that treats the moratorium as a payment holiday will be current on nothing and facing a lump sum in mid-October.
It is framed around policyholders “directly affected.” An association whose property took no damage has no obvious claim on it.
It ends. Around 16 October, ordinary cancellation and non-renewal mechanics resume. The genuinely dangerous moment for an association in financial distress is not August; it is the third week of October.
The Public Assistance line worth reading twice
FEMA's declaration makes Public Assistance funding available to “state, tribal and eligible local governments and certain private nonprofit organizations” in the eleven named counties. Most Indiana homeowners associations are private nonprofit corporations, organised under Indiana's nonprofit corporation law.
We want to be careful here, because this is the point at which association boards most often hear what they want to hear. Nonprofit status alone does not qualify an organisation for Public Assistance. FEMA's eligibility rules turn on the facility and the service — whether the nonprofit owns or operates an eligible facility that provides a service of a governmental nature open to the general public. Association-owned amenities that are restricted to members are frequently held not to qualify, precisely because they are not open to the public.
The honest advice is therefore: it is worth asking, and it is not worth assuming. An association in one of the eleven Public Assistance counties with damage to private roads, drainage infrastructure, or a facility with genuine public access should put the question to the county emergency management agency rather than write the possibility off — and should not build a budget around the answer being yes.
The sequence now facing a board
- Confirm the master policy is not in a lapse posture. If premium was missed in August, find out from the carrier in writing what is owed and when, before the moratorium expires.
- Document the damage while it is documentable. Dated photographs, the adjuster's report, the contractor's scope. Hail damage to roofing becomes contentious precisely because it is arguable months later.
- Check where the deductible actually falls. Indiana master policies increasingly carry separate, percentage-based wind and hail deductibles that are far larger than the all-perils figure. This is the number that decides whether the association is making a claim or absorbing a repair.
- Read the declaration on damage allocation. Indiana condominium law requires a master casualty policy on common areas at full replacement value, but the boundary between the association's obligation and the unit owner's runs through the declaration, and Indiana courts resolve those disputes by reading it.
- Expect the renewal, not the moratorium, to be the event. Nothing in Bulletin 280 restrains pricing at renewal. A third consecutive year of severe convective storm losses is what the market will be pricing, and Indiana is one of the states supplying those losses.
The connection to next January
Storm repair that drains a reserve balance has a second consequence that will not surface until winter. Fannie Mae and Freddie Mac raise the minimum reserve allocation for condominium projects from 10% to 15% of budgeted assessment income for loan applications dated on or after 4 January 2027. An association that spends its reserves on an October roof and does not rebuild them is measured against the higher floor a few weeks later.
What to watch
Two things: whether the Department extends the moratorium beyond mid-October, which would require a further bulletin; and the FEMA Individual Assistance figures, which Indiana Homeland Security has been updating as claims process — 3,631 applications approved and $47.7 million paid or allocated as of this writing.
Related Indiana HOA Topics
- Indiana Dep't of Insurance, Bulletin 280, “Policy Cancellation Moratorium” (Aug. 17, 2026) ↩
- Executive Order 26-21, declaring a statewide disaster emergency (Aug. 13, 2026) ↩
- Indiana Dep't of Homeland Security, “August 2026 Disaster” (storm classification, outage and assistance figures) ↩
- FEMA Release HQ-26-115, major disaster declaration DR-4933-IN (Aug. 25, 2026) ↩
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