Most Americans are not even partially insured for one of the most costly and prevalent disasters in the United States – flooding. There’s a new hope for those who can’t afford pricey flood insurance and it’s being developed and promoted by the federal government and private insurance companies. This is private market flood insurance.
To look at things in perspective, fewer than 20 percent of people had flood insurance during the Superstorm Sandy in 2012 and Hurricane Harvey disaster in 2017. Those were periods of disaster and devastation, made worse by the lack of coverage.
Much is changing in terms of flood insurance options for privately insured. The public option for flood insurance is that of the NFIP. It can not turn down an applicant in a participating area and offers subsidized rates homes that are in a great risk of damage. In the past couple of years, more alternatives are popping up for property owners.
For starters, there is stand-alone flood insurance written on the basis of flood policy forms that were created by the Insurance Services Office (ISO). There are also flood coverage endorsements that are added to property policies, working in conjunction with large reinsurers.
The forms associated with NFIP and ISO both define a flood as the overflow or inundation of surface waters and any mudslides that may occur from it. However, the differences between the two is that NFIP mentions an important characteristic: Flood conditions must affect at least a two-acre area or two properties. So if your property is flooded and your neighbor’s is not, you may not be covered under NFIP.
Another key distinction is that the highest available limit under the NFIP is $25,000 for a dwelling, $100,000 for households contents and $500,000 each for commercial buildings and business personal property.
Among the new efforts and approaches is that of the Inland Flood Coverage endorsements provided by MSO, Inc. MSO is a property/casualty advisory organization which is licensed in 48 states. It’s available for residential property policies in inland areas, but not for coastal properties in the face of a storm.
With MSO, there is a new hope and silver lining for home owners that are gearing up for the Superstorm of the year.