FEMA Tells Agents To Push Flood Zone Insurance

WASHINGTON–The acting head of the federal flood insurance program told a group of independent agents they will play an important role convincing all flood zone residents to purchase an adequate amount of insurance to protect their losses in the future.

The comments by David I. Maurstad came during a continuing education session on how to sell and service flood insurance at the Independent Insurance Agents & Brokers of America's National Legislative Conference and Convention held here.

Mr. Maurstad, acting director of the Federal Emergency Management Administration's Mitigation Division and acting Federal Insurance Administrator, told National Underwriter that while people who are required to have flood insurance under loan agreements have it, the program needs to reach out to those living in the flood plains who do not.

“Our job is to go beyond those who are required to have it,” said Mr. Maurstad.

The aim now is, as new maps for flood plains become available, to get 100 percent participation in the program from everyone living in a flood hazard zone, he said.

Addressing the agents, Mr. Maurstad said independent agents will be the key to achieving this goal of 100 percent participation. He said it is vitally important that agents be educated in selling and servicing the plan so they can educate their clients in the need to purchase the insurance.

“The more people who understand flood risk, the more people will be prepared for flood risk,” he observed.

He said the program has seen steady growth over the past two years, but paid out $23 billion in total claims resulting from the last hurricane season and other risks–$22 billion was from Katrina alone. This is $8 billion more than has been paid out during the life of the program, he noted.

For agents, he said it was important they all be trained in the flood management program, and he hoped that all states would make such education mandatory. Some homeowners who did not purchase flood insurance claimed that either their agent said it was not required or did not offer the insurance.

“We have got to do better than this,” said Mr. Maurstad on educating agents, “and I would hope that this would be so outlandish a claim that no one would make it anymore.”