Explaining the complexities of the National Flood Insurance Program (NFIP) to clients can be difficult for agents. While the NFIP was introduced to help make flood insurance more affordable, continuous regulatory changes, program lapses and increasing occurrences of extreme weather events have brought up the discussion of alternative options such as private flood insurance.
In the wake of last year’s devastating flood events, customers may be receptive to a more reliable private flood insurance policy to help them better protect their financial livelihood. Before proposing this as an option, agents should do a little research to ensure that private flood insurance is the right fit. Here are five things for agents to consider when selling private flood insurance.
1. What would the difference in cost be for the client?
While the NFIP is meant to make insurance more affordable, it’s not always the most affordable option for homeowners. NFIP flood insurance is subject to added costs such as an annual surcharge and their reserve fund assessment. For clients in low-risk areas or for homes that are not used as a primary residence, it may cost less to go with a private insurer.
2. How much monetary coverage does the client need?
The NFIP has very specific coverage limits, so if the cost to replace the client’s home and belongings would be projected to exceed those limits, a more customizable option may be necessary. NFIP coverage is limited to $250,000 for the structure of the home and up to $100,000 for personal possessions. For higher value homes, the damage can exceed the federal limits for coverage. Homeowners will be happy to learn that there are options with higher coverage limits, including both primary and excess programs, at rates that are still affordable.
3. Is specialized flood insurance coverage necessary?
Flood insurance coverage sometimes needs to be tailored to fit the property or the property’s owner. The NFIP does not cover personal property in basements, damage to pools or other outdoor property, damage to detached structures or the added costs of shelter and meals for displaced homeowners. With a private flood insurance policy, the client can add any or all of these valuable coverage options to their policy.
4. Would the client prefer a more simple process for obtaining coverage?
Some clients, especially higher-value homeowners, prefer a more streamlined process when it comes to obtaining insurance for their home or belongings. The speed in which agents can deliver private flood insurance, and the ability to obtain a quote without having to provide certain documents or photos can certainly be an attractive benefit for clients.
Formed in 2013, AmSuisse, Inc. has quickly distinguished itself as a wholesale operation that specializes in working very closely with our agents and broker partners to develop responsive, individualized service for each client. Our unparalleled writing support, industry-specific expertise, marketing support, responsive proposals and quotes, strong customer service, and strong relationships with our carrier partners have all helped us to provide the best possible coverage for our clients. To learn more about our available coverage, contact us today at (800) 485-0229 to speak with one of our representatives.