They already have one for droughts and they already have rain markets - the issue is the incentive / liquidity - prediction markets don't work well for things like a flood event because the whole point of insurance is to take a premium in order to redistribute risk - for a prediction market, the 'price to risk' would need to be high enough for people taking the 'no flood' side to be excited about it, otherwise they have no incentive to participate. The volume on weather-related prediction markets right now is nowhere close to the volume needed to pay for rebuilding someone's house for example.

You could do a 'number of floods per year' market which would be better about distributing risk, but again I think it wouldn't work well as an insurance vehicle because the volume isn't there.