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Flood Insurance Improvements

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Pushing for a better NFIP & private market

The federal Office of the Flood Insurance Advocate is out with its annual report on common issues of frustration encountered by customers of the National Flood Insurance Program (NFIP).  Meanwhile, the National Council of Insurance Legislators (NCOIL) is trying to bring in for a landing a Private Flood Insurance Model Act that could help encourage a more vibrant private market in all 50 states.

The Flood Insurance Advocate’s 2019 Annual Report and Executive Summary identified five primary policyholder and property owner concerns or frustrations about their NFIP policies:

  • Improper Application of Elevation Rating Using an Elevation Certificate (EC): Policyholders feel they have been treated unfairly when an EC was submitted to an insurer, and that the EC was applied much later to rate the policy, resulting in the overpayment of premiums for several years.
  • Loss of Rating Discounts Following a Lapse in Coverage: Policyholders are frustrated when a third party, such as a lender, causes a lapse in coverage by not paying the flood insurance premium on time, resulting in the loss of rating discounts.
  • Confusion Regarding Group Flood Insurance Coverage: Property owners who are issued coverage under the Group Flood Insurance Policy (GFIP) are frustrated when they experience a subsequent flood within the three-year policy term that is not covered.
  • Limited Refunds After Receiving a “Letter of Map Amendment, Out as Shown”: Policyholders find it unfair when there are no refunds for terms prior to the effective date of a Letter of Map Amendment (LOMA) that shows their property is “Out as Shown” (OAS).
  • Denial of Increased Cost of Compliance (ICC) Funds When Permits are Issued before Substantial Damage Letters: Policyholders are frustrated when they are denied ICC claims because the community made a substantial damage declaration after a permit requiring flood mitigation was already issued.

The Advocate’s report includes recommendations to address the issues outlined above.  For more information about the Office of the Flood Insurance Advocate, visit the FEMA website.

Meanwhile, NCOIL is continuing its work to adopt a Private Flood Insurance Model Act that states can use to encourage a vibrant private market as a needed complement and alternative to the NFIP – just as we’ve done here in Florida.  A conference call is scheduled this Friday to discuss the current version of the Act, sponsored by Rep. David Santiago (FL) and Sen. Vickie Sawyer (NC) and an industry-proposed strike-all amendment.

The goal is to have a Model ready for a final vote at NCOIL’s Summer Meeting in July.  As we’ve been reporting here, the latest contended issue has been on the role insurance agents should play in educating policyholders on pricing of NFIP and private policies.  The current version is a compromise and requires “producers” notify applicants that flood polices – public and private – exist.  We’ve been pushing for an active role for agents, going beyond that to include pricing differences, given the large number of Americans who don’t know they live in flood hazard areas.

Our current coronavirus dilemma should serve as a vivid example of what can happen when consumers don’t know what’s in their insurance policy.  We applaud NCOIL on this compromise and look forward to this Friday’s discussion!

For information on the unprecedented opportunities the growing flood insurance marketplace holds, please visit our Flood Insurance & Resilience webpage.

LMA Newsletter of 4-27-20

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Tags: FEMA, National Flood Insurance Program, NCOIL, Private flood insurance, Private Flood Insurance Model Act

“Lisa this is another great newsletter, and we appreciate the time and energy you put into these informative updates – you are on top of these topics!”

Mike Graham, CEO
Smart Vent Products, Floodproofing.com, & Risk Reduction Plus
Juno Beach, FL

“Your newsletter is fabulous!  I greatly appreciate the topics you expose, so that insurance professionals like myself can keep up with the latest events that affect the public we serve and ourselves.”

Cynthia Hoehn, Independent Property & Casualty Personal Lines insurance agent
Clermont, FL

“I have followed your weekly newsletter and podcasts and now have a full appreciation for what you bring to this industry.  You are an inspiring force, plain and simple.  I wanted you to know that you make a difference.  Thank you for all you do!”

Jeffrey Karam, CPCU
Bradenton, FL

“Just wanted to say that I thoroughly love your newsletter. It’s is always informative and insightful to the ins and outs of our industry.  You are an inspiration and an important asset in the insurance world.  Keep up the great work!” 

Cynthia Scott, President
University Insurance Group
Davie, FL

“Just a quick note to let you know how much I have appreciated your newsletter over the years and the assistance they offer for those in the field of claims. We depend on the information more than you will ever know!”

Laurie Rasberry, Chief Claims Officer
Acorn Claims
Prosper, Texas

“Another great Newsletter on Florida industry this week.  Your service and advocacy in Florida is very important to keeping me updated and apprised of the Florida insurance laws, trends and overall environment.  Something similar is very much needed in Louisiana, too.”

Jennifer Tedesco, Esq., Claims Director
Pharos Claims Services
Orlando, FL

“Great article on Risk Rating 2.0!”

Austin Perez, Senior Policy Representative for Federal Housing, Valuation, Insurance and Commercial Issues
National Association of Realtors
Washington, D.C.

“Thank you Lisa for staying on top of, as well as advocating, for Florida residents and legislative reform. Your newsletters are very informative and enjoy reading the points of view.”  

Shawna Miller, Sr. Claims Quality Assurance & Compliance Manager
Florida Peninsula Insurance Company
Jacksonville, FL

“Lisa Miller is a true champion for the insurance industry, with her regular updates! We appreciate all you do and keeping us up to date on priority issues!”

Gillian Lloyd, Account Executive
Zywave
Milwaukee, WI

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