Any agent who has used the National Flood Insurance Program (NFIP) in the past to deliver flood insurance to clients knows all too well that trying to simplify the complexities of flood insurance in the midst of program lapses, regulatory changes and extreme weather events is an important yet arduous undertaking.
With the NFIP debate ongoing, Congress is striving to improve claims standards and make flood insurance more affordable for all Americans. Discussions continue around the development and delivery of dependable, disciplined, reliable private insurance to help more people protect their financial livelihood. The timing is impeccable.
In an industry plagued with constant change and turmoil, people need alternatives. NFS Edge has developed a series of guiding questions to facilitate conversations with clients so you can work together to explore all options for protecting their property and valued possessions.
1.) Does your client need specialized flood insurance coverage?
Consider flood insurance coverage in terms of the specifics of the property and the property owner. Is the client a landlord? Is the client on a fixed income? Is this person holding properties for income-generating purposes? By understanding the needs of clients, agents can more effectively use and configure the suite of flood insurance options available today.
Private flood insurance enables property owners to supplement the NFIP product, providing coverage that homeowners expect from their homeowners policies for exposures such as outdoor property, detached structures, swimming pools and basements.
2.) Does your client have a finished basement or pool?
The NFIP does not cover personal property in basements, so displaced homeowners or homeowners with built-out basements are responsible for these bills. If a storm surge dumps a ton of sand into your client’s pool, are they prepared to shoulder the costs of the resulting clean-up? Private options can help and coverage may be available for swimming pool clean-up protection.
3.) Does your client’s exposure exceed $250,000?
The value of custom-built homes continues to increase with replacement costs rising well above $250,000, the current limit on government-issued coverage. Now, owners of residential homes have options with higher coverage limits at affordable rates through private flood insurance programs, including both primary and excess programs that write significantly above NFIP limits.
4.) Would your client need assistance for additional living expenses if they experience flood damage?
When weighing coverage options remember that the NFIP does not cover additional living expenses. With a private flood policy, the client can opt to add additional living expense coverage. This valuable coverage helps homeowners that have been displaced as a result of a flood by covering the costs of shelter and meals.
5.) Are your client’s personal belongings valued at more than $100,000?
Consider your client’s property holdings beyond the physical structures they own. For example, if your client is a landlord or holding income-generating properties, they typically don’t need contents coverage. However, some clients may need more coverage than what is available from the NFIP to protect their personal treasures. Private insurance options can include coverage for personal property. Excess options are also available to provide even greater protection.
6.) Would your clients prefer a simplified application process?
Speed of delivery and streamlined processes of today’s private flood insurance options are increasingly attractive to clients. The NFS Edge EZ Flood coverage can be quoted by agents typically in less than a minute. Plus, property owners can obtain a quote without an elevation certificate and without providing property photographs.
7.) Would private insurance save your clients money?
Private products are not subject to federal surcharges or reserve fund assessments, and may be less expensive to purchase than NFIP flood insurance, particularly for structures not used as primary residences.
Presenting private flood insurance options not only helps your clients make more informed decisions, it enhances the value you bring to your relationship as you work together to help them protect what matters most – their families, homes and treasured possessions.
About the Author
John Dickson is president of NFS Edge Insurance Agency, Inc., a subsidiary of Aon National Flood Services (NFS), the largest processor serving insurance companies participating in the NFIP. NFS Edge is part of the Aon Specialty Programs Network and offers a suite of private flood products.