In efforts to fund various federal government agencies, the U.S. House of Representatives has passed a short-term measure to extend the National Flood Insurance Program (NFIP), originally in effect from November 21 to December 20, 2019, to extend through September 30, 2020. This additional flood protection can give peace of mind to affected property owners across the nation’s coasts.
The flood protection issues plaguing the NFIP are far from solved, as a better reflection of the actual flood risk that property owners face are still being established.
Also, it is believed that rates have the potential to be roughly 30% higher than they are currently. In that situation, temporary reauthorizations may be beneficial for the marketplace since the private market would be able to more effectively cherry-pick the NFIP’s book of business.
Less flood-related losses would be paid for by the taxpayer, as the NFIP would encourage individuals to turn to the private market to find a more efficient coverage, pricing mechanism and loss adjustment.
The real issue is that the NFIP refuses to raise rates, while the issue of flood risk is becoming increasingly real for homeowners and businesses located along the coasts of the United States.
The NFIP is a limited program since it is not created to cover all damages. That is where the private flood market must step in to offer more coverage options to clients, such as limits that are higher than the maximum limit available through the NFIP. Those solutions have seemed to make people much more interested in purchasing flood insurance.
The extension through September 2020 will allow congress time to consider beneficial long-term reform.
With the current amount of U.S. property owners uninsured or under-insured for risk of flood, reform could not come fast enough. However, one can remain hopeful that the private flood market’s customizable insurance options will assist in protecting more property owners, rather than being exposed to flood damage with no resources other than out-of-pocket spending.
The more damage that is actually realized without proper coverage, the more clients will recognize the need for flood insurance. Although, we are not quite at the point where all property owners believe flood insurance is necessary yet.
Strive to educate consumers as best as possible, in that they should at the very least get a flood quote for an opportunity to make that decision as a property owner, and potentially get coverage based on what their true exposure is.
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 (855) 912-8697 to speak with one of our representatives.