As we continue to see the market change, agents need to be vigilant about reviewing clients’ policies and coverage to make sure they’re adequately covered. Replacement costs skyrocketed due to production issues, record inflation, material shortages, fuel costs, and more. Over the last several years, there has been an increase in damages due to weather-related events. As we are currently in the middle of hurricane season, now is the time to review coverage on things like flood, earthquake, wind events, fires, and more.
Flood zones designated by FEMA require many homeowners to purchase flood insurance by law. While the National Flood Insurance Program (NFIP) has historically covered residents with homes in flood zones, many homeowners are unaware that they should consider purchasing flood insurance, even if they aren’t in one of these zones. The NFIP reports that as many as 20% of annual claims come from homes NOT in a high-risk zone — and that even one inch of standing water can cost a homeowner over $25,000 in water damage. Educating clients about these types of risks is especially important in order to mitigate significant financial exposure.
In the midst of rising insurance premiums across the board, skyrocketing replacement costs, and a rate hike by the NFIP this past April, many homeowners may think this is unnecessary coverage and be inclined to skip it to reduce their premium rates.
This is where agents can and should offer additional flood insurance options through specialty private markets, like Palomar, as an alternative.
By making sure more homeowners are covered, agents can play a crucial role in mitigating claims that affect both homeowners and government programs like FEMA’s ability to help restore people’s lives in the aftermath of a natural disaster.