OLDWICK, N.J.–(BUSINESS WIRE)–In this AMBestTV episode, Patty Templeton-Jones, president, Wright National Flood Insurance Company, said flood modeling is still in relatively early stages, with the National Flood Insurance Program (NFIP) expected to start using its revised risk rating system by October 2020. Click on http://www.ambest.com/v.asp?v=templetonjones519 to view the entire program.
Despite catastrophe events in recent years, and with the United States now in the hurricane season, convincing homeowners of the need for flood insurance remains a challenge.
“Flood insurance is still a tough sell,” said Templeton. “Presently, there are a little over five million people that are protected by the NFIP, which is not nearly enough. Unfortunately, people do not think that they need flood insurance until they are actually flooded. This promotes a problem, since there is a 30-day waiting period for NFIP to take effect. Really, if you have property, you should have flood insurance.”
With innovation being a hot topic, Templeton spoke about the impact it is having on flood insurance.
“Nowadays, there are some private markets coming into the mix of things, with things like modeling. Modeling is still in its infancy stages, but companies are putting their toe in the water by utilizing modeling. Flood is where modeling was about 10 years ago. It is getting better and better.”
Templeton also believes that the NFIP’s new risk rating will have a major impact on the flood insurance product. She said that, “The flood insurance product has been rated the same way since it began. In October 2020, NFIP will introduce Risk Rating 2.0. This will help the market grow, since people will then be able to see what their risk factor actually is.”
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