Although the 2017 hurricane season officially ended on Nov. 1,for many across the United States, the risk of flooding is notover. With heavy rains or snow, lakes, creeks and rivers may flood,causing damage to locations that never expected to have to dealwith the problem. 

Choosing flood insurance used to be a relatively simpledecision. Property owners had two options: no insurance orone-size-fits-all, government-issued insurance through the National Flood Insurance Program (NFIP). Now, thereare more choices. Private flood insurance is growing morerobust, bringing new and relevant options that were never availablebefore, such as coverage for additional living expenses, enhancedbasement coverage and increased limits for various riskclasses.

Customized, specialty solutions

For property owners, having more options means there are moreways to protect their modern lifestyles. The NFIP continues toserve a vital need for many Americans, but there are specificexposures the federal program doesn't cover, such as swimmingpools, detached structures and finished basements. Additionaloptions are essential for people who want peace of mind knowingtheir valued property and possessions are protected.

Consumers today want choice. Look at the telecommunicationsindustry, for instance, where cell phones are ubiquitous. Wouldeveryone have a cell phone if there was only a single service planavailable from a single provider? Probably not. Now, there are avariety of cell phone plans designed for different users, forexample, businesses, families or teenagers. And there are myriadplan configurations to address those needs.

Similarly, having a suite of flood insurance product optionsenables agents to proactively address their clients' needs bycreating customized programs and specialty solutions that were notavailable until now. For property owners, more choices can alsomean more questions.

Related: 5 client takeaways from Hurricanes Harvey andIrma

7 guiding questions

Flood insurance is increasingly complex. Agents must rise to thechallenge by simplifying flood insurance and facilitatingthoughtful planning to help clients explore their options and makeinformed choices in protecting their lifestyles. To help you leadthe discussion with your clients, NFS Edge hasdeveloped the following seven questions as steps through thisevaluation process.

1. Does your client need specialized flood insurancecoverage?

Consider flood insurance coverage in terms of the specifics ofthe property and the property owner. Is your client a landlord? Isyour client on a fixed income? Is this person holding propertiesfor income-generating purposes? By understanding the needs of yourclients you can more effectively use and configure the suite offlood insurance options that are available today.

Private flood insurance enables property owners to supplementthe NFIP product, providing coverage that homeowners expect fromtheir homeowners' policies for exposures such as outdoor property,detached structures and basements.

2. Does your client have a finished basement orpool?

The NFIP does not cover personal property in basements,so displaced homeowners or homeowners with built-out basements areresponsible for these bills. If a storm surge dumps a ton of sandinto your client's pool, is your client prepared to shoulder thecosts of the resulting clean-up? Private options canhelp.  For example, NFS Edge offers homeownersthe option for $1,000 swimming pool clean-up protection.

3. Does your client's property value exceed$250,000?

The value of custom-built homes continues to increase withreplacement costs rising well above $250,000, the current limit ongovernment-issued coverage. Now, owners of residential homes inlower-risk, non-mandatory flood zones have options with highercoverage limits at affordable rates through private flood insuranceprograms.

Related: The truth about 100-yearfloods 

4. Would your clients need assistance with additionalliving expenses if they experience flood damage?

When weighing coverage options remember that the NFIP does notcover additional living expenses. With a private flood policy, yourclient can opt to add additional living expense coverage. Thisvaluable coverage helps homeowners who have been displaced as aresult of a flood by covering the costs of shelter and meals. Forinstance, some NFS Edge policies offer $5,000 peroccurrence in Additional Living Expenses (ALE) along with $500 infood spoilage coverage.

5. Are your client's personal belongings valued at morethan $100,000?

Consider your client's property holdings beyond the physicalstructures they own. If your client is a landlord or holdingincome-generating properties, they typically don't need contentscoverage. However, some clients may need more coverage than theamount available from the NFIP to protect their personaltreasures.

Related: 10 extreme weather events of 2016

6. Would your clients consider an application processthat doesn't require submitting photographs or an elevationcertificate?

Speed of delivery and streamlined processes of today's privateflood insurance options are increasingly attractive to clients. Forexample, agents can often quote a private flood policy in less thana minute. In addition, some property owners may be able to obtain aquote without an elevation certificate and without providingproperty photographs.

7. Would your clients like to avoid federal surchargesor reserve fund assessments?

Private products are not subject to federal surcharges orreserve fund assessments, and they may be less expensive topurchase than NFIP flood insurance.

Related: In Harvey and Irma's wake agents and brokers needto pay attention to flood insurance reform

Need for flood coverage increases

With the National Flood Insurance Program Reauthorization debateongoing and a proposed flood reform bill passed by the House,Congress struggles to make flood insurance affordable and improveclaims standards. Discussions continue around the development anddelivery of dependable, disciplined, reliable private insurance tohelp more people protect their financial wellbeing. 

As the appetite for flood insurance continues to evolve, agentsneed to emphasize with property owners three key themes:

• The risk of flood is substantial; it is constantly and rapidlychanging.
• Our communities can't rely on yesterday's flood guidelines andexperiences to shape today's risk management decisions.
• Property owners must understand they are vulnerable to floodand know what options are available to help them manage thispotentially catastrophic exposure. 

The statistics are staggering. Only about 6% of the U.S.population is insured for the perils of flood. In the Baton Rouge floods last year, 83% of homesdevastated by flood were uninsured. We are seeing similarstatistics with respect to Hurricanes Harvey and Irma. This onlyamplifies our shared responsibility for taking preventative stepsto ensure as many people as possible are protected when events ofthis magnitude happen again. 

Related: Two times that flood damage was notcovered

There's a world of opportunity for agents offering private floodinsurance options. Not only is it a way to differentiate yourbusiness from others in a highly competitive space, it's also a wayto make a difference for your clients by helping them protect whatis most important.

John Dickson is president of NFS Edge Insurance Agency,Inc., a subsidiary of Aon National Flood Services (NFS). Dicksoncan be reached at (888) 888-2169 or [email protected].