Private flood dominates in California
According to AM Best, just 2% of Californians carry flood insurance. The state also has the largest private flood insurance market, with 40% of policies written by the private market. California accounts for around 4% of National Flood Insurance Program (NFIP) policies. "Homes in California protected by NFIP insurance may still be underinsured, given that NFIP insurance is limited to $250,000 per residence, well below California's median home value of nearly $685,000, the second-highest in the country," Christopher Graham, senior industry analyst, AM Best said in a release. "Many homes covered by the NFIP would benefit from an excess policy above the NFIP coverage limit, so opportunities abound for private flood insurers willing to take the risk." The rating agency noted that prior to the deluge of precipitation California has seen since the start of the year, the state had been profitable for those writing private flood. In 2021, private flood insurers had a loss ratio of 9.5 in California; nationwide the loss ratio was 43.3. Related:
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