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Understanding Flood Insurance in 2017

Understanding Flood Insurance in 2017

After flying through the House, many believed the Flood Insurance Market Parity and Modernization Act would zip through the Senate, too. The Act was thought to become law sooner than later. However, things didn't go as smoothly as planned in the Senate.

The National Association of Professional Surplus Lines Offices (NAPSLO) and their officials continue to work to get the bill through the Senate. They continue to work to get this Act into law.


Understanding the Act

Why is the Flood Insurance Market Parity and Modernization Act of such importance for NAPSLO? For a variety of reasons, but one seems to stand out: the bill clarifies the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12).

The new Act defines the ability of privately issue flood insurance when meeting a lenders' purchasing requirements. Initially, the Act required lenders to accept private flood insurance for mandatory purchase. Then language was added before the bill was passed that created confusion. Lenders who were evaluating policies for the purpose of complying with mandatory flood insurance requirements became confused.

Now, the Flood Insurance and Market Parity and Modernization Act clearly defines a private flood insurance policy as:

"A policy issued by a company licensed, admitted or otherwise approved by the state."

According to Brady Kelly, the Executive Director of the NAPSLO, the bill strives to clarify a number of items, including the surplus lines market:

"All we're doing in this legislation is clarifying that the Surplus Lines market is, in fact, an eligible market from which to accept a private Flood insurance policy. I say that because Surplus Lines insurers have long written Flood insurance policies — this isn't a new opportunity.

Before BW-12 was signed, our market has always served as a supplement to the NFIP There are a number of homes and commercial properties that don't fit within the terms and conditions of the NFIP policy.

So we've oftentimes served as an excess option, or an option when the NFIP policy doesn't do the trick. From that perspective, the primary goal is to preserve the types of solutions the market was already providing."


No Smooth Sailing

While the bill is hung up at the Senate now, the House was no issue. In April of last year, the Flood Insurance Market Parity and Modernization Act flew through the House with a vote of 419-0.

While the victory seemed like smooth sailing, many have noted the result stemmed from a lot of hard work. The NAPSLO began educating legislators on the bill and the surplus lines marketplace at the start of 2014. These efforts were in preparation for the day the bill reached the House.

According to NAPSLO higher-up Keri Kish, the surplus line marketplace is:

 "It's not something everyone just knows about and understands. Our education really helped them understand how the Surplus Lines market functions as part of the private insurance market — how we developed and why it's important to maintain our ability to provide those options."

Luckily, many believe the failure in the Senate was more due to timing than legitimate concern over surplus lines. The election took a lot of time and energy for those in Washington. Many Senators were in heated state races and didn't have time or concern to hear about flooding.

Once the elections have passed, many surmise the bill will get more focus in the Senate. Not only will the election be over, but increased interest in flood issue will be coming up next year, as the National Flood Insurance Program is being reauthorized.


Optimism in 2017

Many NAPSLO members are excited and optimistic about the idea of the bill passing the Senate in 2017. Kish certainly is:

"I'm confident it will pass this year. There's no reason not to do it now. Ultimately, this is giving consumers choices. I can see no policy concerns in passing it this year."

While optimism is good, we'll have to wait and see if the bill goes through. If issues arise, the potential impact on the surplus line marketplace will certainly be noticed. The bill needs to be passed if the private market is to be a viable alternative to the NFIP.


Understanding Your Homeowners’ Insurance Policy

Understanding Your Homeowners’ Insurance Policy

When homeowners buy an insurance policy, they most often opt for a standard policy. They very often do not take the time to read their policy when their receive it, and this can be a big mistake. If you don’t read it, you will not know what coverage you have and which of your home’s contents are covered. This review is essential.

The majority of policies offer coverage for the structure and contents of the home, as well as living expenses if the home is unlivable due to a fire or other covered issue, and damage or injury to family members or that your pets may cause others. While you may think you have a good understanding of what is covered and not covered on your homeowners’ policy, you may be surprised to find that your policy covers much more than you think.

Following you will find some examples of coverage that you may have on your homeowners’ policy. Each policy is different, however, so it is important that you read your insurance policy in its entirety or talk to your agent to ensure you understand exactly what insurance coverage you have.

1. Burglary in the Dorm

If you have college-age children and they live away from home in the dorms, you may have coverage for theft or other loss of their personal belongings under your homeowners’ policy. While you may have thought you would have to buy an additional policy to cover your children’s belongings when they live on campus, many homeowners’ policies have this coverage included at a certain percentage of your property coverage.

2. Spoiled Food

If the power goes out your refrigerator and freezer can’t function, and this could lead to the loss of all the food in these two appliances. This could add up to a significant expense, and your homeowners’ policy may offer coverage for the spoiled groceries. This coverage is normally subject to a limit of approximately $500 or less, but it can come in quite handy.

3. Falling Objects

Very rarely, you hear about things falling from the sky and crashing into someone’s home. Your homeowners’ policy may cover this. This could include such things as plane tires or even large chunks of ice, which are a peril no matter where they come from.

4. Clean-Up

If a crime, such as a murder or suicide, happens in your home, there could be some clean-up needed. This could be at a huge cost, but some homeowners’ policies cover this cost. If you think this could be a coverage you need, check with your agent to be sure you have this type of coverage.

5. Credit Card Unauthorized Use

Your belongings are covered by your homeowners’ policy no matter where you are in the world. This includes $500 of coverage if your credit cards are used without your authorization.

6. Your Policy May Not Cover

You now understand that there are some surprising things that may be covered by your homeowners’ policy, but there are other things that you may not be aware that your policy may not cover. While some of the more common ones are listed below, there are other items discussed in this presentation by Bankrate that are not so common and are not covered by your insurance. The common ones include:

7. Wear and Tear

Time causes personal property and your home to wear out or become more susceptible to being damaged. This damage is not going to be covered under your policy.

8. Flood

Flood is excluded from nearly every homeowners’ policy. This type of coverage is normally purchased separately through the National Flood Insurance Program or through a private flood insurance company. When you are choosing a policy, make sure you have enough coverage to pay for the total cost of rebuilding.

9. Earthquake

Damage from earthquakes is also not covered under homeowner policies. Earthquake coverage must be purchased separately as an endorsement or earthquake policy.

The thing to remember is that a homeowners’ insurance policy can be personalized to fit your particular needs. Talk to your agent to create the right coverage package for you.

Most homeowners' insurance policies can be customized to cover a wide variety of perils. Talk to Skyline Risk Management, Inc. (718) 267-6600 about your needs and to find out what types of special coverage may be available.

9 Emergency Storm Preparation Tips

9 Emergency Storm Preparation Tips

You may have to worry about tornados in the Midwest. If you live in Louisiana, then floods are always on your mind. Earthquakes are no strangers to Californians. Florida sees its fair share of hurricanes. No matter where you run your business from, there's a chance disaster could strike.

If a disaster does occur and you're face-to-face with a catastrophic event, you need to be prepared. You need to have a plan in place. You need to be able to get your business back up and going as quickly as possible.


Always Be Prepared

The easiest way to assess how fast your business could react is to pay attention to your exposures. When doing so, ask yourself these questions:

1. What needs to happen? After a catastrophic event, there will be certain parts of your business that need to be up and running as soon as possible. Other areas of your business aren't as important. Decide what must happen immediately after a disaster and come up with a plan to get essential activities going again quickly.


2. Can you continue to provide value? If a catastrophe were to strike tomorrow, would your company be able to continue to provide value and service to your customers? If not, you need to look into how you operate and find ways to continue to be there for your customers no matter what.


3. Whose help would you need to get back on your feet? Many times, companies need help from insurance agencies, contractors, and more to get them back to work. Think about which individuals you would need help from to restart operations.


4. How can you help your customers? Even if you could not provide the full scope of services and value to your clients right away, you need to think of ways you could continue offering some of your services. A little effort goes a long way, especially when dealing with a disaster and your loyal customers.


5. Do you know your community? You should be aware of all of your local emergency resources and be able to communicate with them immediately if a catastrophe were to occur. Don't forget about your local connections!


6. Do you have other protections in place? Have you fully insured your company in every possible way? Did you pay extra for some preventative measures when building your organization? Focus on finding and cultivating ways to protect your business if something terrible were to happen.


7. Did you protect your vital documents? Did you guard your legal documents—files, tax returns, and such—properly? This is absolutely vital before a disaster strikes. You need to back up everything.


8. Would you still have access to your vital records? Did you backup everything? You want to make sure all of your documents are readily available as you try to recover your business after a storm.


9. Did you do it all? After going through these tips, take a second to step back and consider if you did everything you could. Often, business owners will take numerous preventative measures, but forget to cover some of the basics. With a little introspection, you should be able to avoid any such fate.


SKYLINE

You cannot predict when that storm will hit, but you can always be prepared for it. With a little foresight, you'll have your company back up and churning in dollars before you know it. Use these tips and questions to ensure you're always ready. 

Concerned about how your business or home would hold up against a storm? Contact Skyline Risk Management, Inc. (718) 267-6600 to voice your concerns.