Upcoming conference, NCOIL update
Hurricane Isaias two weeks ago caused significant flooding in Pennsylvania and with it, stories of homeowners caught off-guard and without flood insurance to cover the damage. A new national survey shows residents significantly underestimate their exposure to flooding and believe flood insurance is expensive and thus can do without it. We’ll be tackling this issue at an upcoming conference. We also have an update on the proposed Private Flood Insurance Model Act.
Neptune Flood’s inaugural Neptune Consumer Survey of Flood Awareness Survey was based on about 1,000 people who either own or rent their homes in 36 states. 63% believe they have a “low risk or no risk” of flooding – among Floridians it was 65%. We know from last year’s Verisk report that more than half of U.S. homes (62 million) are at “moderate to extreme” flood risk, nearly five times FEMA/National Flood Insurance Program figures. The difference in numbers: better modeling and analytics. Now, to better get the word out to consumers!
The Neptune survey found 70% of individuals without flood insurance cited not being at risk as a primary reason for not buying it. But 54% of those surveyed do not know what flood zone they are in! This clearly presents an opportunity to provide better consumer education and reduce the coverage gap. The survey also noted a misperception on cost of flood insurance, with 45% of respondents not purchasing or renewing because of cost concerns, yet the survey puts the average policy cost at $708.
To address this education divide, the Federal Association for Insurance Reform (FAIR), based here in Florida, will be holding a six-week virtual conference series beginning September 23 on “Building a Culture of Preparedness.” I’m going to be moderating the panel on flood risk: Realtors–The New Flood Insurance Experts? How do we increase flood insurance coverage? Although Realtors are not expected to sell flood insurance, they are on the front lines in dealing with a buyer’s questions and concerns. Will empowering Realtors by providing them knowledge and resources to share with clients help make this cultural change and help to close the flood insurance coverage gap? If not through Realtors, how do we educate insurance consumers? I hope you’ll join us for this critical discussion. To register and learn more about the event, visit fairfound.org/events (save $25 on registration with code: LMA25).
Another way to improve the coverage/protection gap, is to encourage insurance agents to play a bigger role in education. An updated draft of the Private Flood Insurance Model Act is expected to be voted on next month by the National Council of Insurance Legislators (NCOIL) Special Committee on Natural Disaster Recovery. It includes provisions to ensure consumers are educated at the time of sale about flood insurance, both federal (NFIP) and private. LMA is continuing its efforts with a coalition of those who have worked tirelessly in Florida for a private flood market and hope to see it replicated throughout the nation through this Model Act.
LMA Newsletter of 8-17-20
