Property Insurance

Insurance companies hoping to gain access to over 800,000 free-agent flood insurance policies are fighting on Capitol Hill this week. Since State Farm Insurance dropped the policies last year to lighten its burden, other major insurers hope to gain control of them to increase their profits.

Major Insurers Want Control over Policies

A number of major insurance companies, including Fidelity National, Allstate, Travelers and The Hartford are hoping to gain access to flood insurance policies State Farm dropped last year, which represent approximately 15 percent of the $3.3-billion flood insurance market.

While State Farm did not insure property against floods or storm surgesthis is handled by the National Flood Insurance Program (NFIP)the program relies on private insurers to administer the policies and State Farm was NFIPs largest administrator.

State Farm dropped its policies in the middle of 2010 as it, among other insurers, grew frustrated with the shaky NFIP and its continual expirations, which left many policyholders without coverage for weeks at a time.

Read more…

Purchasing new “market-based” flood insurance policies will not be a mandate for homeowners in new flood zones if two Democratic senators are able to pass legislation in the midst of the lame-duck session. Many homeowners have been placed into a new flood zone that would require them to pay for flood insurance, but the senators hope to stall this from occurring until the flood zone maps can be reviewed.

Senators Want to Stall Mandates for 5 Years

Democratic Sens. Charles Schumer (D-NY) and Richard Durbin (D-Ill.) are trying to push legislation that will give homeowners affected by new flood maps in districts like Long Island, NY and East St. Louis, Ill. a c

Read more…

Until hurricane Katrina, the Federal Emergency Management Agency (FEMA) flood insurance program was fully self-funded through private flood insurance contributions for decades. But Katrina caused so much damage from flooding that FEMA is now billions of dollars in debt. It has recently sought to protect itself from disproportionate payouts by reevaluating the nation’s flood zones, and the new maps are forcing many to buy flood insurance who never have before.

Flood insurance is not like homeowners insurance. For one thing, it doesn’t cover all of your valuables in the event of a loss. By

Read more…

Mandatory Coverage

1. Federal law requires homeowners in NFIP communities with a federally backed mortgage to carry flood insurance if their home lies within a high- or coastal high-risk flood zone. The Federal Emergency Management Agency (FEMA) conducts flood hazard analysis–a detailed hydrological analysis–to determine which areas in the United States experience the greatest chance of flooding. Areas requiring flood insurance experience a 1 percent chance of flooding annually and a 26 percent chance during the life of a 30-year mortgage.

Optional Coverage

2. Homeowners and renters in low and moderate risk zones have the option of purchasing flood insurance.

Read more…

Homeowners holding flood insurance policies must be celebrating nationwide with the news that the National Flood Insurance Program was extended for one year. After months of expirations and short-term extensions, the U.S. Senate finally caved to pressure from insurers and gave the program a long-term extension.

NFIP Extended to Sept. 30, 2011

After a series of one- to three-month extensions of the National Flood Insurance Program, some of which actually being allowed to expire for days or weeks at a time, the U.S. Senate finally agreed to give the program a longer extension until lawmakers could decide how they want to handle key issues.

This long-term extension resulted from strong urging of companies carrying flood insurance that wanted lawmakers to make a decision on the program before it expired on Sept.

Read more…

A number of private insurance companies are reconsidering participation in the National Flood Insurance Program (NFIP) after a Congressional stall and massive losses. The future of the NFIP has been in question for some time as Congress looks at ways to provide flood insurance to individuals in need. However, after suffering through months of ups and downs in the insurance sector, some insurers think the best solution is to pull out.

NFIP Has Been on Shaky Ground for Some Time

The National Flood Insurance Program has been going through a series of changes for some time that has left it in a semi-fragile state.

Read more…