Focusing on Flood

If you’re like me, you have not only been watching the health care votes in Congress but also been following H.R. 2874 and H.R. 2868.  These are bills set to initiate the 21st Century Flood Reform Act since the National Flood Insurance Program (NFIP) expires on September 30th of this year.

Additionally, they are meant to address the looming debt being carried by the current Businesswoman standing on desk with flotation deviceprogram.

As we know, flood insurance can cover rain/water damage to a building, personal belongings or both.  Current caps on coverage through the NFIP are $250,000 for building and $100,000 for personal belongings.  Further coverage for off-site accommodations during repairs are not covered.

The Republican package on the table calls for a cap in risk premium of $10,000 and also ask for a five-year NFIP renewal whereas the Democrats want a $3000 cap and a 10-year length.

The main push for these bills is to give private insurers more presence in the flood insurance market.  Although the changes do not address either the recent complaints about the program or the NFIP’s debt.  Both items need to be addressed quickly.

According to recent reports, we’re going to need flood insurance even more.  Climate change will amplify storm surge and flooding.  Additionally, the danger of increasing sea levels looms as well.

In states like New York and New Jersey, planners are trying to establish barriers and sand dunes to protect against property.  In landlocked states like Michigan, Missouri, and Kentucky, rivers and, streams rise and crest now yearly.

One company is out ahead of the rest.  HCI Group, a Florida company, offers flood coverage in Florida, but is looking to move into New Jersey, Maryland, California, North and South Carolina, Ohio, and Pennsylvania.

Their program would act as an endorsement to a regular homeowners policy and as a standalone coverage through their insurtech subsidiary TypTap.  Their coverage does not have a 30 day waiting period and elevation certificate.

Their coverage offers up to $500,000 for building coverage and $250,000 for personal property coverage – double what the NFIP offers.

Best of all HCI is on board and ahead of most of the industry with their tech and application process.  All the insured has to do is type in their address, answer three questions and pick an agent.

Since they have already proven themselves in Florida, which hosts the majority of the US Flood policies, they surely will not have a problem moving into other states.  Either way, there is a lot of changes in the flood insurance on the horizon.

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16 thoughts on “Focusing on Flood”

  1. So happy to read this post!

    I’ve been anxiously watching the flood insurance bills in Congress because I live in North Carolina and unfortunately, we’ve seen more and more flooding, as of late. My current policy is inadequate and I’ve been fearful about what might happen in the case of a disastrous event. I look forward to learning more about HCI and was wondering if you knew of any other insurers that offer stand-alone policies in my area. My family definitely needs a supplement to bolster our existing policy.

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    1. Unfortunately, the only plan available now (until September) is the National Flood Program. Your homeowner’s policy insurance carrier should be able to refer you to a carrier who can provide a ‘write your own’ policy with that program. Since the program is in debt, the policy (especially in NC) will be pricey. Hopefully, HCI gets approved soon so we all can start taking advantage!

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  2. I’m quite concerned about the reauthorization of NFIP because I have a couple of family members who have been affected aversely due to flooding and we found out the hard way that their flood insurance was inadequate. There must be a better way for existing homeowners to have affordable and realistic flood insurance. My hope is that if the private sector is able to offer rates that those costs are reasonable and not out of reach for the people who need it the most.

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  3. My flood insurance rates skyrocketed after Hurricane Sandy and I’m hoping that the updates to the NFIP along with opening the market to private insurers help with actuarial rates. It took us a couple of months to straighten out my policy and rates and I’m hoping that the national policy will (properly) address the current inaccuracies. The last thing you want to worry about after a disaster or crisis is coverage or alarming rates.

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  4. As much as I love Miami, I am considering moving to a less flood-prone area, especially in the face of rising sea-levels. Officials have already hinted at surrendering some of the areas of the city to nature to help combat this issue and many homeowners (as well as many of my neighbors) are not happy about this but in the long run, I do believe that this action will be inevitable. Nature, the environment and in this case, the sea will win. I’m not sure if insurance alone is the answer although it does provide some relief and a false sense of protection. I’m also concerned that private insurance costs will be too high, unrealistic and not sustainable.

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  5. With the promise of more private insurers entering the flood insurance field after the reauthorization of the NFIP, I do hope that homeowners take a cautious approach before ditching their existing policies. Newer insurers will need to be scrutinized carefully in the face of more natural disasters and their viability in the face of catastrophe.

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  6. I have a question…..with the upcoming Flood Insurance bill moving through Congress, will it address and remedy the still looming issues around actuarial pricing and why some properties are still assessed below their full risk rate (within the existing federal program)?

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    1. I do not believe it will with the direction the bill is taking. The National Flood Program is in debt and nothing has been suggested (as far as I have read) to remedy that debt. Instead, Congress is trying to place the program into private insurer hands – but that too seems shaky.

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  7. I’ve been overjoyed to read about how (in many parts of the US) there has been more attention given to increasing education and measures around coastal protections in areas prone to flooding. These measures will also help with insurance costs for high-risk communities. With the upcoming Sept deadline of the reauthorization of the NFIP, I am curious to see what if any affordability assistance measures will be included for those living in poverty.

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  8. Praying for the people of Louisiana and Texas as they endure the aftermath and tropical storms created by Hurricane Harvey!

    I’m wondering how the national flood insurance works. I imagine many people will be displaced. Is there a specific protocol for temporary or recovery housing? Unlike Hurricane Katrina, it looks like FEMA and the state government is working more efficiently.

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    1. I am praying as well for a quick recovery to those in Texas and Louisiana – The flood program allows for businesses and homeowners purchase flood insurance. In the past, when I have worked as a claims adjuster, FEMA sees to clearing debris, providing monetary aid, and counseling. I have also seen the Red Cross working with the government a lot to see about housing, clothing, and food. Rest assured, they’ve got this.

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  9. In the wake of Hurricane Harvey, can you clarify how FEMA and the NFIP works? I just heard a news story that stated that many people who were affected during Hurricane Sandy are still fighting to get adequate financial settlements due to what the NFIP valued their property worth versus what the home owners believed that their properties were worth. How does this work and how can you ensure that you are getting adequate coverage?

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    1. The flood program (NFIP) allows for businesses and homeowners purchase flood insurance. As an onsite claims adjuster, I have seen FEMA (a federal agency) clearing debris, providing monetary aid, and counseling. I have also seen the Red Cross working with the government to see about housing, clothing, and food.

      As far as your values and coverage definitely follow up with the agent/company you placed your coverage with on a renewal basis. I am not familiar with the report you speak of here; however, as an NJ resident, I am aware that our state agencies and insurers have gone the extra mile to make sure everyone is indemnified. What frightens me is based on a report in the news in USA Today 80% of Hurricane Harvey victims have no flood insurance at all.

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