Filed Under:Agent Broker, Agency Management

Getting into the habit of offering Flood insurance

All properties are at risk of flood damage, so agents should quote Flood insurance whenever they quote a Homeowners' policy. (Photo: iStock)
All properties are at risk of flood damage, so agents should quote Flood insurance whenever they quote a Homeowners' policy. (Photo: iStock)

Every year, flooding causes an average of $50 billion in damages, making it the costliest and most common natural disaster in the United States.    

The majority of the federal disaster areas declared by the president of the United States involve floods.

Consider these statistics from FEMA:

  • Floods or flash floods have occurred in all 50 states over the past five years.
  • Over the course of a 30-year mortgage, in a high-risk flood zone there is a 26% chance of a flood, versus a 10% chance of a fire. 
  • Homes outside of high-risk flood areas file more than 20% of all National Flood Insurance Program (NFIP) claims and typically receive one-third of federal disaster assistance for flooding.

Homeowners policies and most commercial property policies exclude flood damage. Coverage is available from the NFIP and a few private insurers, yet many property owners still fail to purchase Flood insurance.

What can insurance agents and brokers do to help?

“All properties are located in a flood zone,” said Keith Brown, CEO of Kalispell, Mont.-based Aon National Flood Services, which services NFIP policies. “So all property owners have risk. When agents quote Homeowners' policies, they should also consider quoting Flood insurance.”

“A common misconception for many agents and consumers is that there must be a catastrophic event for a Flood policy to pay, when actually only two properties need to be affected by rising water,” said Brown.

“For agents in Florida, writing Flood insurance is pretty routine,” said John Dickson, president and CEO of Coral Springs, Fla.-based Advanced Insurance Coverages Inc., which is a division of Aon National Flood Services. “The agents in coastal areas are aware of the risk and more prone to quote and write flood insurance.”

Florida accounts for 1.9 million of the NFIP’s 5.2 million policies in force.

Homeowners in inland states, however, don’t believe there’s a high risk of flooding and tend to purchase Flood insurance only when there is a mortgage requirement, said Dickson.

Get a flood-zone determination

“Every time agents quote a property policy, whether it’s personal or commercial lines, they should consider running a flood-zone determination,” said Julie Duncan, client relations director at Aon National Flood Services. “If it’s a preferred risk, it’s easy to quote a policy. And the majority of quotes agents prepare will be for a low-to-moderate risk area.”

When speaking with a client and explaining that Homeowners' insurance excludes flood coverage, Duncan said, “It’s as easy as an agent saying, ‘Because your Homeowners insurance excludes flood, I’ve prepared a Flood quote for you. Your premium is only ‘X’ dollars a year, because your home is located in a low-to-moderate risk zone.’”

Write-your-own or NFIP direct?

Eighty-six percent of all NFIP policies are written by agents and brokers participating in write-your-own programs, while only 14% are written directly through the NFIP.

If an agency does business with a write-your-own carrier, its web engine has the ability to run a flood-zone determination. Once the physical address of the property is entered, it runs a flood-zone determination which provides the map panel suffix number and flood zone. 

“It typically takes 60 seconds, maximum,” said Duncan. “It’s not a lengthy process. If an independent agent writes for several homeowner and commercial carriers, it is likely some of those carriers will belong to the WYO program.”

The write-your-own program is more streamlined than dealing directly with the NFIP, said Duncan.

Elevation certificates

Some agents struggle with writing Flood insurance when there’s a requirement for additional underwriting information, such as the elevation certificate, said Duncan. While not required in low-to-moderate flood-risk zones, it is a requirement for properties in higher-risk zones. 

“If the agent runs the flood-zone determination and it comes back in an A- or a V-zone,” said Duncan, “the next question on the application is the date of construction. If it’s built after the Flood Insurance Rate Map date for that community, then the system won’t allow an agent to quote the risk unless elevation data is added.”

The Flood Insurance Rate Map date is the date the community began participating in the flood program.  The elevation certificate verifies that the building construction is flood-zone compliant.

“Providing the elevation certificate is the responsibility of the property owner,” said Duncan. “If a new home is being built, then a licensed surveyor can provide that document to the homeowner.”

Flood insurance-selling tips

“Agents tend to develop consistent processes,” said Dickson. “Every time they offer Auto insurance, they offer uninsured motorists coverage. If the client doesn’t want UMC, they sign a waiver.”

Dickson recommends agents and brokers in all states habitually run a flood-zone determination when quoting property insurance, whether it’s personal or commercial lines.

“It addresses the risk of (Errors and Omissions) exposure,” said Duncan. “That’s an important part of the conversation.  By running a flood-zone determination and finding out if the risk qualifies for preferred rates, the agent can offer to quote Flood insurance and document any rejection.”

“Signing a waiver is the last part of the discussion. Offer to quote the coverage, and if the insured declines it, some agents will include a rejection right on the application,” said Duncan. “It causes the property owner to think twice.”

Paula M. Keith, CPIW, is a client Relations director at Kalispell, Mont.-based Aon National Flood Services. Contact her at

Related: How insurance agents can counsel clients after a flood

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