There's never been a flood here, so why should I care about flood insurance?
If this statement sounds at all familiar, you have likely raised the subject of flood insurance with clients, only to be told that the coverage is not needed.
Most people don't think about flood insurance, simply because they've never experienced a flood where they live. As a result, many agents find the product difficult to pitch to clients and prospects. But, before you relegate flood insurance to the realm of nuisance products, consider a different view of flood insurance that may resonate with your clients and make this product a core part of your business.
Severe weather & urban development: Changing the face of flood risk
Unprecedented weather has spawned unexpected major flooding events that have impacted communities across the nation.
In one week's time, California residents experienced heavy rains that resulted in widespread flooding and mudslides. Storms in the Sierras piled up to 79 inches of snow in the Lake Tahoe region in 48 hours, totaling more than 10 feet in the region.
According to the Lower Mississippi River Forecast Center at the office of the National Weather Service, The Louisiana Flood of 2016 was triggered by a complex, slow-moving low-pressure weather system that caused the record two-day rainfall in parts of East Baton Rouge, Livingston and St. Helena parishes. Previously, this region was estimated to have a 0.1 percent chance of flooding.
Recent winter storms hammered the northeast with blizzard conditions, dumping more than a foot of snow in six states, causing coastal flooding along roads.
These are only a few examples, but the resounding takeaway is that rapidly changing weather patterns are significantly changing and shifting the risk of flood.
Weather is not the only thing exposing communities to increasing flood hazards. Urbanization, commercial development and changes in land use practices directly affect flooding today. The more homes we build, the more areas that we groom and the more concrete we pour, the fewer places water has to go. As development and land-use practices accelerate, our exposure and vulnerability to floods changes — and, accordingly, our view of risk should follow suit.
Changing flood risk: A valuable opportunity for agents
Capital markets have responded to this increasingly dynamic peril with a growing number of Flood insurance solutions. Yesterday, there were only two options: no insurance or a one-size-fits-all, government-issued insurance. Now, you can present your clients with an array of private options to help create a customized solution designed to protect individual lifestyles. Consider flood insurance as a way to differentiate your agency and a way to proactively respond to your clients' needs. By understanding the specific risk and needs of your customers, you can more effectively use and configure the suite of flood insurance options available today.
Of course, having a lot of options can be overwhelming. As you craft solutions for your clients, it helps to separately assess the key characteristics of the customer and the property. For example, is your customer a retiree on a fixed income? Is this person a landlord holding properties for income-generating purposes? Does the property include one or more outbuildings that merit special attention? These and similar questions help agents determine whether the customer should consider contents coverage, which deductibles to contemplate, and whether a private portfolio solution is warranted.
The flood universe continues to change
The constant here is the flood universe continues to change. So, consider the ever-changing risk of flood an opportunity to educate your clients on current weather conditions and potential flood hazards when evaluating options to help safeguard their assets.
The most important takeaway is that the risk of flood is not static, so you can't rely on yesterday's experience to drive today's life-impacting risk management decisions. If you want to help protect what's important to your clients, preserve their lifestyles and provide security for their family treasures, you must be vigilant and intentional when it comes to assessing flood risk.
As agents, it is our responsibility to educate homeowners about current risks and modern tools to manage those exposures. In the end, we seek to provide our clients with safety, financial security and peace of mind. We need to move the flood conversation to the forefront and pose the following question to homeowners: With severe weather events and flood hazards happening at every turn, why would you leave it all to chance?
Your clients worked hard for their homes. They've sacrificed for their families. Wouldn't it be foolish for your customers to not protect these investments and accomplishments? Be sure they understand the risk. Explore all options in a rapidly evolving marketplace. Make sure you're looking at everything that's available today to give your clients the sense of security and peace of mind that they rightfully deserve.
John Dickson is President of NFS Edge Insurance Agency, Inc., a subsidiary of Aon National Flood Services (NFS). NFS Edge offers a suite of private flood products: EZ FloodSM, FloodWrapSM and Excess Flood. Contact Dickson at 888-888-2169 or john.dickson@nationalfloodservices.com.
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