THE TOP 10 STATES FOR FLOOD INSURANCE CLAIMS New Jersey: 63,805 New York: 52,986 Louisiana: 10,574 Connecticut: 5,411 Florida: 3,096 Mississippi: 1,788 Texas: 1,527 Delaware: 1,252 Maryland: 1,237 Virginia: 1,147 Source: NFIP, 2012
FLOOD POLICIES CURRENTLY IN FORCE
1,701,039 Building coverage only
Contents coverage only
Both building and contents coverage Source: FEMA
entice many carriers to offer their own flood products. From 2003 to 2012, annual losses or paid claims through NFIP averaged $4 billion a year, while the average amount of premiums written was $2.6 billion.
real about pricing, the private market can’t compete for risks that currently flow through that program,” Kelley says. “That’s still quite a way off. There are still caps on rates, and a 25% increase doesn’t make them actuarially
“As the private market starts to develop, I envision new products and new solutions to flood insurance risks” Brady Kelley, NAPSLO Getting to rates where NFIP will break even is vital for a healthy private market, and NAPSLO executive director Brady Kelley doesn’t see that happening in the near future. “The NFIP rates have been woefully inadequate for a long time. Until NFIP gets
sound.” Yet that doesn’t mean there isn’t a future for a private flood market. NAPSLO is currently working to ensure the passage of a congressional bill that Kelley says may spur new solutions to flood risk.
The Flood Insurance Modernization and Market Parity Act of 2015 would correct an oversight in the 2012 Biggert-Waters Act, which failed to include E&S insurers as eligible to provide private alternatives to NFIP policies. Surplus lines carriers are not explicitly banned via Biggert-Waters – and thus far, they have not encountered opposition from regulators – but NAPSLO is hoping the clarification will preserve its members’ place as a provider of supplemental flood insurance. From there, a private primary market will be easier to grow. “A lot of innovation comes from the surplus lines market,” Kelley says, “and as the private market starts to develop, I envision new products and new solutions to flood insurance risks that may increase because of this bill and the Biggert-Waters Act.”
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