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Flood Renewal & Congress — Two More Weeks

Posted By Staff Reporter, Tuesday, December 11, 2018

This time it is a two-week renewal. The National Flood Insurance Program (NFIP) has been extended until December 21st as part of the stop-gap federal government funding deal.

It is the ninth extension since September 30th of last year.

The extension puts off the showdown between President Trump and Democrats over funding the wall he wants to put up between Mexico and the United States. No one expects the much-needed flood insurance reforms to happen anytime soon because once the real battle over the wall begins, the flood insurance issue will be pushed to the back burner.

The much-in-debt ($20-some billion) NFIP desperately needs reform. Conservatives — like outgoing House Financial Services Committee chairman Rep. Jeb Hensarling of Texas — want a more actuarily sound program with policyholders paying premiums that fit the potential damages from flooding.

PIA National wants reforms as well. The association advocates:

  Working with members of Congress to support legislative solutions to create sensible options for growing the private flood insurance market, promoting flood risk management policies, transitioning to risk-based rates and reforming the NFIP

  Working with the Federal Emergency Management Agency (FEMA) to support solutions for eliminating the NFIP's debt and putting the program on a path to fiscal stability ahead of September 30, 2017, when the program is up for reauthorization

  Participating in the Flood Insurance Producers National Committee (FIPNC), an advisory committee to the federal government on issues concerning the NFIP.

Many in Congress say the steep rate hikes will make coverage unaffordable for many families whose homes are vulnerable to flooding. Another issue is higher rates could end up driving down the value of the homes in those flood zones.

Rather than raise rates, Louisiana’s congressional delegates — and delegations from other states along the Gulf Coast — want Congress to invest in projects that protect homeowners from flooding. They say this, and better flood mapping, will cut down the payouts being experienced by the NFIP.

Since California Democrat Maxine Waters — an advocate of NFIP reform — will take over the committee in January, these delegations are hoping they’ll be able to convince her to slow down and see things their way. Among those in that camp are Louisiana’s Sen. Bill Cassidy and Sen. John Kennedy. They want a six-month — or longer — extension to give Waters and the committee time to consider going a different direction with flood insurance.

They’re joined by Florida’s Marco Rubio and New Jersey’s Bob Menendez.

As for the current extension, Kennedy said, “I’m willing to work all day, all night and weekends to ensure that the government is fully funded and that families in Louisiana can receive flood insurance. We have several federal departments and agencies that still need funding, and we need to be smart about the appropriations process. I think these two weeks will give us time to settle on fair and effective legislation to keep the lights on.”

Source links: The Advocate, PIA National, Insurance Journal

Tags:  congress  flood insurance  pia western alliance 

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Flood Insurance — The Non-Action Action Continues

Posted By Staff Reporter, Tuesday, December 4, 2018

By the time you read this everything could have changed. On Friday the seven-day extension passed by both the House and Senate to extend the National Flood Insurance Program (NFIP) expires. December 7th is also the same day Congress has to pass a continuing resolution to continue to fund most of the rest of the federal government.

Some parts have of the budget have been agreed upon and have been extended into 2019. The NFIP has not. However, the Senate did — on a voice vote — pass a six-month reauthorization. It will last until May 31, 2019

There is a chance the House will go along with the Senate’s decision. But this is where the opening statement of this story comes into play. If the House does go along then we have another six-months before the expiration and short extension game starts anew.

Republican Sen. John Kennedy of Louisiana sponsored the six month extension. He said he’s going to go to work in the House to see if he can get the job done. He noted that more than five-million Americans get flood insurance through the NFIP and he is “frustrated with the inefficiency in Washington that is causing us to extend the program again without long-term reforms, but families deserve to be protected.”


In a statement PIA National said it supports Sen. Kennedy’s bill. “We support Senator Kennedy’s effort to extend the program through May and will support any effort to extend the program into 2019 that gives the new Congress time to find agreement on a long-term reauthorization of the program. We will continue to work with Congress to achieve this in the coming days,” PIA National said.

One of the conflicts some in Congress have with the NFIP is the fact that tax-subsidies are being used to rebuild and repair flood damaged homes that have been rebuilt several times.

Records at the NFIP managing Federal Emergency Management Agency (FEMA) show that close to 37,000 properties from the East Coast to California have been rebuilt not just once but several times. Some have been done dozens of times. Those same FEMA records show 18,000 of those homes are currently covered by NFIP policies and 15,000 haven’t done the work to reduce the risk of future flood damage.

Here’s another problem. At the beginning of the current hurricane season, nearly $7.4 billion of the $20-plus billion that the NFIP is in debt is from repeat claims.

Louisiana — Sen. Kennedy’s state — has the most repeatedly flooded properties over the last 40-years. It accounts for 23% of the NFIP’s total claims.

PIA National supports a long-term renewal of the NFIP and is working with members of Congress to support legislative solutions to create sensible options for growing the private flood insurance market, promoting flood risk management policies, transitioning to risk-based rates and reforming the NFIP.


Source links: Insurance Journal, Business Insurance America

Tags:  Flood insurance  insurance content  insurance news  NFIP  Senate 

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​ Flood Insurance Changes — Noncompete Provisions

Posted By Staff Reporter, Tuesday, October 9, 2018

Here’s how things work. Under the National Flood Insurance Program’s (NFIP) agreement insurers can sell flood policies under the Write-Your-Own program. What they can’t do — under a contractural clause — is cancel those policies and sell their own, less-expensive plans.

Currently 86% of the NFIP policies sold are from the WYO program.

Now FEMA (Federal Emergency Management Agency) is changing things and removing those restrictions. And it is doing this without action by Congress. Or at least ahead of what Congress might have planned or not planned at all.

A private insurer can now offer private flood insurance to an insured as long as it meets certain criteria. The new FEMA/NFIP policy is called code 26 and it allows the cancelation of a policy as long as a policyholder has purchased a similar policy from somewhere else. It also has to be on the same property that was insured by the NFIP.

If it is in mid-term, a refund can be given. In the past changes like this could only take place at renewal.

Other than looking at getting more private insurers involved in selling flood insurance, other changes are coming. On January 1 next year rate increases are coming to make properties more actuarially sound. Some subsidies are being phased out.

Source link: Business Insurance


Tags:  Around the PIA Western Alliance States  flood insurance  National flood insurance program  PIA 

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Dilemma: Understanding Insurance — Homeowners

Posted By Administration, Tuesday, August 21, 2018

Insurance.com surveyed 1,000 homeowners on homeowners insurance. Over half of them don’t understand their policies — at all. How bad is it? Bad. This sums up the study:

  84% of homeowners think you pay a deductible when you file liability claim

  48% don’t understand what liability home insurance covers

  24% don’t know how much liability insurance they have

  33% don’t compare rates to make sure they’re getting the best deal

  25% say they’ve never read their policy

That — of course — could leave them vulnerable and underinsured.

Worse again. Too many don’t comprehend or are confused about parts of the home insurance policy:

  Just half — 52% — know what liability insurance covers

  20% think liability covers damage to the home

  Just under 20% say it covers injuries for themselves and their families

Not a surprise:

  Women are more likely to understand liability insurance than men

  The figure is 55% to 49%

  Just 44% of those 25 and 34 will know anything about homeowners

  Over half of those in the other age groups had the right answer

  85% of those over 65 understand liability insurance

That said, we go back to the opening statement: 

  84% incorrectly think a deductible must be paid on a liability claim

  Just 16% — correctly — know you don’t

Then there’s the medical part of liability insurance:

  75% don’t understand how medical payment coverage differs from liability

  25% correctly know the payments cover up to a set amount for those injured in a home regardless of who is at fault

  20% say they don’t know the answer at all

  20% believe it is only for medical bills for them and their family

And — again — women were more likely than men to understand medical payments:

  28% of women answered correctly

  22% of men answered correctly

Replacement cost — another mystery to homeowners:

  52% understand replacement cost repairs damage to the home or replaces it at current prices

  33% think it applies only to personal items that are damaged or stolen and they are paid for after depreciation

  41% correctly know it's the total replacement cost of the home

  24% say it is the amount it will cost to rebuild a home with the same materials used in its construction

  23% think it is the market value of the home

  12% say they have no clue

As for personal property coverage:

  60% know a homeowners policy replace personal possessions up to a certain limit

  29% think it replaces all items in a home

  7% think it replaces trees and landscaping

  4% think it just covers valuable items like jewelry, antiques or art

Flood insurance is another critical area of misunderstanding:

  66% know home insurance doesn’t cover flood damage from groundwater

  70% of women know that

  80% of people 45 to 54 know that

  80% of people 55 to 64 know that

  Less than half of those 25 to 34 know flood insurance isn’t part of homeowners

Credit scoring is one area people are informed on and 88% know credit history can influence the rate paid for homeowners insurance.

Letting insurers know:

  87% will notify the insurance company about an addition that adds value to the home

  67% will notify the insurance company about a renovation project that doesn’t increase the footprint but that increase the home’s value


When it comes to telling the insurance company about increased risk:

  31% who add things like a pool or a trampoline don’t mention it

  52% who add a dog to the family don’t mention it

Last — comparing rates:

  33% of homeowners don’t compare rates to get the best deal

  39% of women don’t and 24% of men don’t

  27% — 32% of men — compare rates when the policy is up

  39% say they compare rates every two or three years

Source link: insurance.com

Tags:  flood insurance  Insurance Content  Insurance Industry  Insurance News  Weekly Industry News 

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A Flood Insurance Extension — Now What?

Posted By Administration, Tuesday, August 7, 2018

PIA National is pleased the U.S. Senate passed a four-month extension of the National Flood Insurance Program (NFIP). It is extended to November 30th. The House passed the same measure last week.

President Trump signed the extension into law. PIA National Vice President of Government Relations Jon Gentile said by doing so helped Congress avert a lapse of the NFIP by a matter of hours.

“The passage of a clean extension by the House and Senate is positive. That said, waiting until the last minute to act should be a thing of the past. Congress now has four months to work to find a way to provide a long-term reauthorization of the program. That work should begin today,” he said.

An extension is one thing. Fixing the NFIP permanently is quite another. The program remains about $25 billion in debt. Critics say the program is not sustainable and radical reforms need to come about and come about soon. PIA National agrees with some of that criticism and wants reforms that include the expansion of more private insurers into the market.

Those same critics also point out that five-million or so properties are insured by the NFIP and those insureds often pay premiums that are way below market value. The Congressional Budget Office (CBO) says 85% of the policyholders in the highest risk areas are in that category.

Howard Kunreuther, the co-director of the Wharton Risk Management and Decision Process Center said, “No question about it, this is a new era of catastrophe. Some of it has to do with climate change, some of it has to do with people moving into hazard prone areas and thinking they're safe. 

Another report done in 2017 by the National Resources Defense Council (NRDC) found over 30,000 of them are considered severe repetitive loss properties. That means they’ve had four or more separate claims totaling $5,000 or more. Some have had two or more claim payments that exceeded the value of the property.

The NRDC says repetitive loss properties account for just 6% of the properties insured by the NFIP. They account — though — for 9.6% of the payouts. From 1978 to 2015 that was $5.5 billion.

That same report also shows 75% of those classified as moderate value — that’s less than $250,000 — have few options when it comes to what is now being called flood, build, repeat. They’re trapped into high risk properties and have no escape.

Attempts at reform in 2012 included rate increases but with some rates doubling and tripling the reforms were quickly — themselves — reformed. That led to rules that say rate hikes are limited to a maximum of 18% in a year.

Kunreuther said another problem is people not understanding the danger of flooding. Part of it is how the system is explained to them. “Don't tell a person that there's a 1-in-100 chance of a flood next year, they'll say, ‘I'm not going to worry, it's so small.’ Tell them that over 25 years, even without climate change, that probability is greater than 1-in-5, and then they pay attention,” he said.

Some say part of the reforms Congress needs to take is to help property owners in high-risk flood zones by buying them out. Others think mitigation like vouchers, loans or lowering flood insurance premiums could help. Mitigation means adopting building codes and help owners beef up homes to survive harsh weather.

The National Institute of Building Sciences says for every $1 spent on mitigation, $6 is saved for future disasters.

Those are some ideas. Others have other ideas. But what it really comes down to is communities in the future having to make hard decisions on where things are built and what the NFIP is going to be willing to insure for affordable prices.

Chris Hackett is the senior director of personal lines policy at the Property Casualty Insurers Association of America (PCI). He said, “Any time you see a major flood or devastating event, a lot of times you may see politicians come in and say, ‘We're going to rebuild.’That may be very popular at the time, but I think it's important to maybe take a moment and think about, is it really the best use of resources to rebuild in this exact location after this disaster struck?"

Source link: PIA National, U.S. News and World Report

Tags:  flood insurance  Insurance Content  Insurance Industry  Weekly Industry News 

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Reauthorizing the National Flood Insurance Program

Posted By Administration, Wednesday, May 24, 2017

A new bill doing a five-year reauthorization of the National Flood Insurance Program (NFIP) has been introduced in the House Financial Services Committee. Rep. Jeb Hensarling of Texas chairs the committee and said he wants a law that “begins the transition to a competitive, innovative and sustainable flood insurance market where consumers have real choices.”

Translation: maybe more private carriers doing flood insurance.

The NFIP is $25 billion in debt to the U.S. Treasury and one of the goals of the new renewal bill is to reduce that amount significantly. To do it the bill proposes surcharges and assessment rates and to boost the NFIP’s reserve fund by 1% a year.

Added to the plan is instructions to the Federal Emergency Management Agency (FEMA) — that administers the NFIP — to find ways to minimize — as Hensarling put it — “the chances of future borrowing from taxpayers by giving the NFIP the tools it needs to return to a strong financial footing while protecting homeowners.”

The new plan — if enacted — cuts the cap on premium rate hikes from today’s 18% to 15%. And in an effort to get more private insurers involved, the NFIP will be barred from selling policies for new structures in high-risk areas if private insurance is available to take on the risk.

Meanwhile, during the five-year period the NFIP will begin adjusting rates based on the actual risk to properties insured. It will also do away with policies for homes whose replacement value goes above $1 million.

Republican Sen. Bill Cassidy of Louisiana and New York Democratic Sen. Kirsten Gillibrand have proposed provisions that aren’t in the bill that is now before the House committee. Their ideas including making premiums affordable to a broader base of consumers via vouchers to help low income households.

PIA National Vice President Government Relations Jon Gentile worries the new renewal push might end up cutting the reimbursement rate for Write-Your-Own (WYO) carriers. He says that would be counter-productive and lead to fewer policies being sold.

“A cut to the reimbursement rate for Write Your Own insurance companies would likely trickle down to independent agents who sell this very complicated and vital line of insurance. That cut would lead to an exodus of qualified agents selling it. Any proposal to reauthorize the NFIP that would impede agents' active engagement in selling flood insurance should be rejected," Gentile told Best's News Service.

PIA — however — does understand the need to address the NFIP’s debt. “

We are aware the program is heavily in debt due to hurricane Katrina and Superstorm Sandy. However, fewer qualified agents selling the products will hurt consumer access and slow the NFIP's take-up rate when the very opposite is needed to ensure the continued viability of the program,” Gentle said.


Source links: Insurance Business America — link 1, link 2

Tags:  Flood  flood insurance  Insurance Content  Insurance Industry  Insurance news  Reauthorizing the National Flood Insurance Program  Weekly Industry News 

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A Bumpy Road Ahead for NFIP Renewal & Reform

Posted By Administration, Wednesday, May 10, 2017

Republican Sen. Bill Cassidy of Louisiana and New York Democrat Rep. Kristen Gillibrand have drafted a bill to reauthorize the National Flood Insurance Program (NFIP) before it expires in September of this year.

The proposal is a 10-year renewal.

Generally the response has been positive.But some are pushing back on some of the things the two senators want to do with the NFIP. Property Casualty Insurers Association of America (PCI) senior vice president Robert Gordon started with the positives and said the long-term renewal is a good idea but he’s worried about the surcharges and fees on private flood insurance policies.

“Consumers of private flood insurance already pay their own taxes and private insurance companies already pay the taxes so to penalize them with a third layer of federal taxes, which is something FEMA doesn’t have to do, not only is it an unfair competitive burden, but you’re imposing a double penalty on the private sector to pay for a public good,” he said.

Gordon thinks this could create a whole new avenue of federal taxes on private products which is not good.

Tom Santos of the American Insurance Association (AIA) likes the proposal giving access to NFIP claims data to private insurers and prohibiting the Federal Emergency Management Agency (FEMA) administrator from banning Write Your Own Insurers from offering private insurance outside of the NFIP.

But Santos is concerned about other items in the bill. “It’s not clear to us that some things in there would actually sufficiently expand the ability for the private sector to write the coverage (or) whether it would improve the program’s fiscal footing. For example, there are some things in there that seem to suggest we want to keep rates at some level to keep them affordable, yet there are things in there where they’re eliminating certain exclusions or they’re attempting to raise coverage limits. We need to figure out the balance of what that means to the program and figure out other affordability questions. There are a lot of moving pieces and we need to figure out the impact of all those moving pieces,” Santos said.

Former Oregon Insurance Administrator and now Pennsylvania Insurance Commissioner Teresa Miller wants the new bill to include more flood insurance options. Translated that means more options for private insurance.

A report issued on Miller’s research found several sources for private insurance that will work for consumers. The report stated, “her department’s research has found numerous instances where homeowners were able to get comparable coverage through the private market at substantial savings over that available through the NFIP.”

Miller wants:

  To allow people to change mid-term and go to a private insurer

  To allow lenders to recognize private insurers as being legit coverage

  The NFIP to share historical data with private insurers so they can better price premiums and identify high risk areas

“Providing this historical information will help private insurers better understand the risks they face from properties in a given area, so they can appropriately price their products, and through this increased competition, provide additional and less expensive options to homeowners,” Miller explained in the report.

The idea of private insurance is also gaining traction with former presidential candidate and New Jersey Governor Chris Christie. Fresh from the wounds inflicted by the NFIP’s $350 million of payment denials and the insurance debacle of Super Storm Sandy, Christie told Fox News private insurance is the way to go.

“What we should do is privatize flood insurance. It won't be hard to sell to New Jersey voters, especially Sandy victims, because If they never heard the phrase 'national flood insurance program' again, it would be the best day of their lives,” Christie said.

A couple of New Jersey’s key players in Congress addressed the issue as well. Sen. Robert Menendez — who forced FEMA to reopen New Jersey claims and get the $350 million paid — thinks reforms are needed but disagrees private insurance is the way to go.

“I have serious concerns that private insurance companies would only cherry-pick the low-risk policies, forcing taxpayers to underwrite everything else, causing rates to skyrocket and the program to grow more insolvent,” he said.

That ignited a debate with Rep. Tom MacArthur who is a former insurance executive and a big time critic of FEMA and the NFIP.  “The most important things to me are that we make flood insurance more affordable and accountable to the people of New Jersey, and that we invest more in mitigation. The private sector can help address these issues and should be allowed to participate to the fullest degree possible."

Menendez shot back, “The very reason why the NFIP was created was because private insurers refused to take on that added risk. Flood insurance is too important to allow it to simply be gutted by profit-seeking actors looking for a free-ride in which they collect all the fees and bear little to no risk.”

Source links: Insurance Business America, Business Insurance, NJ.com

Tags:  Casualty Insurance Association  Casualty Insurance Providers  FEMA  Flood Insurance  Insurance  Insurance Regulations  NFIP  NFIP Reform  NFIP Renewal  Political Talk 

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Flood Insurance: NFIP Renewal Coming

Posted By Administration, Tuesday, April 18, 2017

The National Flood Insurance Program (NFIP) rates rose again on April 1st. A high percentage of homeowners saw price hikes as a result. The average rise for an annual premium is 6.3% and the average payment is now $878. That doesn’t include various fees, taxes and surcharges that can be tacked on depending on where you live.

Areas with higher risks, or those with second homes or homes that have experienced multiple claims will see much higher rates. Some of those will see rates that run four digits and not three.

This year isn’t bad compared to what’s coming. Rates could rise up to 25% a year until the NFIP becomes a sound taxpayer investment. That could be awhile since the NFIP is $24 billion in debt.

Worse, a whopping 43% of Americans think flooding is covered by their homeowners policy. And Aon National Flood Services VP Cynthia DiVincenti said there are 25 million homeowners living in areas where they really ought to have flood insurance.

That’s about 5x the number who are now insured.

The high costs of insurance and the debt of the NFIP is something Congress needs to — once and for all — deal with but Loretta Worters of the Insurance Information Institute (I.I.I.) says instead it keeps kicking the proverbial can down the road.

“Even when it was easier to get things done, there were all kinds of delays. The last time the NFIP ran out, it took 17 short-term extensions, four lapses and almost four years before the program was reauthorized,” she said.

Flood insurance — says Nat Wienecke of the Property Casualty Insurers Association of America (PCI) — is causing all kinds of problems that aren’t even related to flooding. “It’s terrible for consumers. You think you can close on your house … and you can’t.”

DiVincenti agrees. She said, “over 1,300 home sales were disrupted every day.”

But reforms — like the Biggert-Waters Act — have done little to fix the problem. It attempted to put flood rates on a sound actuarial basis but it caused a huge rise in rates and consumer complaints caught the ear of members of Congress who backed down and reformed the reforms.

Or back to Worters’ comment — kicked the can down the road.

Maybe that’ll change. The Trump administration — and a lot of Republicans — want to privatize flood insurance. That has some screaming. That includes Consumer Federation of America (CFA) advocate Robert Hunter. He said private insurance will just “cherry pick” the least risky properties and leave the rest to government or to no insurance availability at all.

SmarterSafer.org thinks the solution is a mix. The group is a coalition of environmental, real estate, insurance, and taxpayer groups and wants Congress to rethink how flood insurance is done. Improving flood mapping and risk analysis is a good place to start. And it wants — no surprise — more choices for consumers and that means privatizing and letting consumers choose what direction they want to go.

Source links: The New York Times, CBS News, Insurance Business America

Tags:  Flood  flood insurance  Flood Insurance: NFIP Renewal Coming  Insurance Content  Insurance Industry  Insurance News  Weekly Industry News 

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Oroville’s Dam Just the Tip of the Infrastructure Iceberg

Posted By Administration, Wednesday, March 29, 2017

Oroville’s 770-foot dam needs fixed and it needs fixed now. Independent safety experts from all walks hired by the Federal Energy Regulatory Commission say if the dam isn’t repaired and the damaged spillway in working order by fall, it places the 188,000 people of that area and their property in significant risk — again.

Fall is when the rainy season hits Northern California in earnest.

A report from the California Legislative Analyst's Office notes to get the repairs done it will take around the clock efforts between now and then. And it has set November 1st as the target date to finish. It also points out that tens of billions of dollars are needed to repair aging dams and levees around the state and that Oroville’s dam is just the tip of the proverbial iceberg.

California Department of Water Resources spokeswoman Maggie Macias said her department’s objective is to have the spillway redone by the November 1st date. “We’ll be working round-the-clock through spring, summer and fall to make that happen,” she said.

A price tag for the repairs has not been set yet.

That California’s Legislative Analyst’s Office finds it will take tens of billions to repair the state’s dams and levees is not surprising. Nor is it much a surprise that other — similar — agencies in other states and at the federal level find the nation’s infrastructure in terrible condition.

The American Society of Civil Engineers (ASCE) is one such group and in its just released every four-years report, it gave the condition of the nation’s roads, bridges, dams and other infrastructure a grade of D+.

President Trump has promised to spend about $1 trillion in public and private funds in the next few years to begin to fix the problems but the engineers say it is going to take at least an additional $2 trillion — in addition to what cities, counties, states and the federal government has already budgeted — to raise the grade.

To get to a grade B by 2025 will take about $4.59 trillion.

ASCE President Norma Jean Mattei said, “We need our elected leaders — those who pledged to rebuild our infrastructure while on the campaign trail — to follow through on those promises with investment and innovative solutions that will ensure our infrastructure is built for the future.”


Source links: Insurance Journal, Bloomberg

Tags:  Flood  flood insurance  flood reform  Insurance Content  Insurance Industry  Insurance News  Oroville’s Dam Just the Tip of the Infrastructure   Weekly Industry News 

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Flood Insurance: The Times are Changing

Posted By Administration, Wednesday, March 29, 2017

The Trump administration wants to cut $190 million from the National Flood Insurance Program’s (NFIP) flood mapping program. In its 2018 budget, the administration said the agency will need to find “other more effective and fair means of funding flood mapping efforts.”

The decision has consumer advocates like the Consumer Federal of America’s Robert Hunter. His group’s concern is old maps will lead to construction in areas that are flood prone. Or — just as bad — cause insurance rates to rise to pay for necessary new mapping.

The Federal Emergency Management Agency (FEMA) runs the NFIP and a spokeswoman said the cost of mapping has been shared for the last 15 years by the NFIP and flood insurance policyholders. “The president’s budget directs us to explore avenues to shift these costs away from general appropriations,” the spokeswoman said.

One of the big concerns is how important flood mapping is in the reforms and efforts to modernize the flood insurance market. But with $24.6 billion in debt to the U.S. Treasury, the administration is looking for ways to cut costs.

Leigh Ann Pusey — who is the CEO of the American Insurance Association (AIA) — said her association and others in the business are concerned. “Understandably, we’re all concerned about the potential to undermine efforts to modernize the maps,” she said.

However, Pusey did note we’re early in the budgeting stage.

Budgeting or not, the nation’s flood insurance program is rapidly changing. More and more companies are jumping into the flood insurance market. One of them is Superior Flood and its president Matt Herr said business — at least for his firm — is very good and will likely only get better.

“There are about 5.6 million policies the NFIP [the National Flood Protection Program] has, give or take, in any given month — there’s so much business out there. Ninety-eight percent of all policies are insured through the NFIP, so they have a monopoly on the marketplace,” he said.

The two other major players in the private flood market are The Flood Insurance Agency and Poulton Associates. All three firms have been working very hard to convince Congress and the NFIP to loosen up.

“Nine-out-of-ten people will say that they’re unaware that there’s a private market out there and it’s our job to make sure that everyone knows that. We’re slowly changing that between the three of us [major private flood companies] but it’s something the government doesn’t really promote,” Herr said.

And this is really good for consumers. Herr said he and his two competitors can offer better prices to lower risk homes. “We’re growing rapidly — saving people thousands of dollars, anywhere from 50-100% off the NFIP and giving them a broader policy. It’s fun, it’s like working in an ice cream shop. Everyone is excited. I’m excited that private flood exists for families that are overpaying for something and getting very little out of it,” Herr added.

A customer paying $2,400 a year to the NFIP could end up with just $871 a year in private insurance. The policy — however — will be much broader.

“The private market is here to stay, on our side, because we see clients that we price fairly under the NFIP — and give them a broader policy, as long as they qualify under our underwriting guidelines,” Herr said.


Source links: Insurance Journal, Carrier Management, Insurance Business America

Tags:  flood insurance  Flood Insurance: The Times are Changing  Insurance Content  Insurance Industry  Insurance News  Weekly Industry News 

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