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Private flood or NFIP?

9 reasons renewals may be happier with private

Private flood insurance is fast becoming a preferred option for policyholders who have relied on the National Flood Insurance Program (NFIP). Here’s a summary of the main advantages of private flood vs. NFIP to help you determine which clients could benefit more from a private flood policy.

Many policyholders fit well within the bounds imposed by the FEMA-administered NFIP, but certain property owners find that federal flood cover falls far short of their coverage needs. The benefits of private flood over NFIP coverage may help you decide if your renewals are better suited to private:

1. Policy customization
Unlike the NFIP’s one-size-fits-all policy, private flood allows carriers to write unique policies or adjust limits.

2. Higher coverage limits
NFIP caps coverage at $250,000 building/ $100,000 property, while private flood can cover into the millions.

3. Faster time-to-coverage
Private policies often go into effect in under a week, as opposed to the NFIP’s 30-day wait for coverage.

4. Broader definition of flood
The insured find comfort in the simpler definition of what constitutes a flood found in private policies.

5. Coverage for additional structures
Private policies tend to include wider coverage of additional structures on the premises.

6. Alternative accommodation coverage
The NFIP offers zero coverage for living expenses, whereas private policies generally include some coverage during repair.

7. Broader coverage for personal property
Private policies generally allow greater property coverage vs the NFIP’s long “property not covered” list.

8. Competitive rates
While the NFIP rate structure is set by the government, the private coverage market is competitive, which drives rates down.

9. Less administrative hassles
Private flood often does not require a flood or elevation certificate, and quotes can be prepared in seconds.

One potential downside to private flood is that some companies that offer it are untested by major disasters, which makes it difficult to determine their reliability. And your clients don’t want to find that out the hard way.

Our advice? Contact our flood team who can help you personalize your renewals so that clients get coverage that corresponds to their real flood risks and unique coverage needs.

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