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Sea Level Rise Will Take Most Property from Floridians

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Florida tops in private flood coverage

A new report shows Florida property owners stand to lose the most from projected sea level rise; insured flood losses have doubled in the past decade yet insurance still covers just a fraction of the losses; the last ditch effort to renew the National Flood Insurance Program (NFIP) before it expires at month’s end, while Florida leads the nation in private flood coverage; and NOAA shares its data with the insurance industry.  It’s all in this week’s Flood Digest.

Losing Property: Researchers with Climate Central, a nonprofit news organization that analyzes and reports on climate science, have determined that private property owners across the U.S. will lose an area the size of New Jersey by the year 2050 due to sea level rise.  Their report, Sinking Tax Base, says as many as 4.4 million acres are projected to fall below the high tide line nationwide and revert to public property, as shown in the graphic below.  Four states – Florida, Louisiana, North Carolina, and Texas – account for 87% of the total area lost.  Findings by county are detailed in more than 250 reports.

From Climate Central

Monroe and Miami-Dade counties will be most affected in Florida.  Monroe has 46,324 land parcels (52% of its total parcels) that are projected to be in the annual flood risk zone by 2050.  Their current taxable land value is $3.47 billion.  Miami-Dade has 14,135 land parcels (2.4% of its total) worth $3.81 billion for tax purposes that will be in the annual flood risk zone by then.

Flooding & Insurance: The Swiss Re Institute’s latest report shows insured flood losses doubled to $80 billion globally during 2011-2020 compared to the previous decade.  In 2021 alone, losses amounted to $20 billion, yet just 18% of those losses were covered by insurance.  The report says that new data and modeling enable risk-based pricing of flood risk and is opening up a new market for private insurance companies.  They saw an annual 20.5% growth rate in direct flood premiums written since 2016, compared to a 1.8% growth in NFIP premiums.  Private premiums last year totaled about $2 billion compared to $4.7 billion in NFIP premiums.  The report said there is a “huge potential” for the private market if it invests more in modeling and risk awareness-raising initiatives to help close the protection gap, as nearly 40% of the U.S. population lives in coastal counties and 10% in floodplains.

NFIP Reauthorization: AM Best is out with its list of Top 25 Writers of US Private Flood Insurance and the cool graphic below that shows Florida remains the leading state in private flood policies, with $166 million in direct premiums written in 2021.  I’m honored to have served as an advisor on passage of Florida’s two key laws (SB 1094 and SB 542) and negotiated needed changes leading to successful passage of the national Private Primary Residential Flood Insurance Model Act in 2020, which is adding more states to the map each year.

From AM Best

The NFIP is still the big player, with 4.5 million policies and Floridians are its biggest client, with 1.7 million of those policies.  The program’s current authorization from Congress expires on September 30 and it looks like once again, there will be just a temporary rather than long-term reauthorization.  A group of Republican senators has released a proposal to extend the program by one year.  Democrats already have a bill to extend the NFIP another five years.  The Biden administration has submitted a list of proposals to reform the NFIP, as we’ve previously reported.

NOAA Insurance Data: NOAA will host the second of a series of dialogues with interested members of the insurance and reinsurance industry on September 29 from 2-3:30pm ET.  The focus will be on extreme precipitation and flooding, with NOAA experts discussing data, tools, and trends relevant to the insurance industry.  The forum will also be an opportunity for the industry to share thoughts about future needs and areas for collaboration.  You can register for the webinar by visiting https://attendee.gotowebinar.com/register/1854325685618691853.  

LMA Newsletter of 9-19-22

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Tags: Climate Central, Flood Insurance, Flood Mitigation, Model Private Flood Insurance Law, National Flood Insurance Program, NOAA, Private flood insurance, Private Primary Residential Flood Insurance Model Act., Sea Level Rise, Sinking Tax Base

“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

“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

“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

“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

“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

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