From the Front Lines: Flood


Jeffrey Wyrsch   

Vice President
The Van Dyk Group
Manahawkin, New Jersey

How did you get started at your agency?

This is a family-owned agency. In 1996, I started as the IT manager. Eventually, I transitioned to personal lines manager and have been running the department ever since.

Why flood insurance?

Our agency is located on Long Beach Island, which is a barrier island in southern New Jersey, and flood insurance has always been vital to the communities we do business with. Since the agency’s inception in 1946, the Van Dyk Group has been actively writing flood insurance with the NFIP.

Greatest flood insurance challenges?

Our biggest challenges are keeping up with the changes in the flood insurance industry and doing our best to provide our customers with the best coverage at an affordable price. Ongoing changes to the NFIP, along with the emerging private flood marketplace, create new challenges on a regular basis. That means it is more important than ever to improve our product knowledge and be familiar with alternative flood insurance options.

Biggest flood insurance changes?

For a very long time, nearly all flood insurance was written through the NFIP, and rates were relatively reasonable. However, over the past several years, and particularly since Hurricane Katrina, NFIP rates have been increasing. In recent years, some of these increases become much more dramatic.

There has also been a significant increase in alternative flood insurance options through the private market. In cases where NFIP policies have become unaffordable, this has been very helpful to agents and customers. While it has taken many years for the private market to make an impact, this increased availability, coupled with recent federal regulations, has made placing flood business in the private market much more common. It’s a very competitive environment.

Future of flood insurance? 

I foresee rates in the NFIP continuing to rise, particularly with older, non-elevated homes. As these rates increase, market share will shift away from the NFIP toward the private market, particularly higher-priced policies.

For some people, flood insurance will become unaffordable. This will cause many homeowners in flood zones to either sell their homes below market value or look into raising their homes. Homes that are sold below market value are frequently demolished and replaced with new homes that meet flood insurance guidelines, which reduces the property’s flood risk and therefore the cost of flood insurance. Raising a home, which is very expensive, would have a similar effect.

Flood insurance advice for a fellow agent?

Pay attention to new and emerging private flood markets. Exclusively using the NFIP will put you at a competitive disadvantage. The marketplace is rapidly changing. If you don’t stay on top of the changes, you will be left behind.

For agents who are new to flood insurance, it is important to firmly understand the products you are working with. Flood is very different from most other lines of insurance, so you must know what you’re selling, what the coverage restrictions are and what alternative options are available.

Favorite flood insurance success story?

Our agency provided flood insurance for an elderly couple whose home was completely destroyed during Superstorm Sandy. Months after the storm, they were still having trouble finding adequate coverage through their NFIP policy. I took on their case and, by working extensively with their claims adjuster and FEMA directly, we eventually helped them receive the coverage they needed to completely rebuild their home.

However, during the home’s construction, the NFIP changed their elevation guidelines for building in a high-risk flood zone. That meant that when their home was rebuilt, the NFIP’s rate skyrocketed. They were once again devastated and could not afford their flood insurance. Again, I was able to help them and placed their insurance with a new private flood program at a rate that was much lower.

Will Jones is IA assistant editor.