When it comes to reevaluating the flood exposure, agents will need to change their entire approach to selling this coverage.
Rather than just offering coverage to those in “higher-risk” flood zones, agents will need a continuum of options to offer to clients, as well as a new narrative in which history is not the only criteria for determining whether someone needs this protection—and the private flood insurance market will be an important part of the solution.
In the past year, three separate processes have expanded the private flood insurance market.
First, ISO filed a standalone personal flood policy, approved by many states, which, when added to ISO’s commercial flood policy from the prior year, provides insurers and agents with “standard” policies with many more coverage options than the traditional NFIP policies.
Second, some company partners have filed their own proprietary forms to provide this critical coverage for more of their customers.
Finally, in January 2019, federal banking regulators issued new rules that allow financial institutions to accept private flood insurance policies for federally backed mortgages as required by Biggert-Waters. While this took considerable time to finalize, the rule is a critical element in advancing private flood insurance.
Is it time for you and your agency to take advantage of these important changes? Here are a few steps to consider undertaking to develop your agency’s capacity for maximizing the opportunities of private flood insurance:
- Acquaint yourself with the new ISO flood forms and any company proprietary flood policies. Your review should include all eligibility, underwriting and rating rules applicable to these policies.
- Reach out to your carrier partners to determine their appetites and plans to provide flood coverage.
- Discuss with your carrier partners how to value unusual flood exposures. Make sure to touch on the vast array of coverages indirectly related to flood insurance, including business income, extra expense, additional living expense and more.
- Set realistic goals to expand your flood production over the rest of the year. Consider adopting the recent “moon shot” goal of doubling your flood policy production in the next five years.
- Share your successes with the industry. Report policy hurdles to your state’s technical affairs committee.
- Obtain the hazard reports filed by your community and region to learn how they describe the local flood risk.
- Become a go-to local flood consultant for not only your clients, but also your local press and emergency management departments.
How do you think we can make flood insurance more meaningful and practical for clients? Share your thoughts.
John Putnam is a consultant for Putnam Assurance & Risk Services in Colorado Springs, Colorado.