selling flood insurance

[bobson]

Does anybody actively sell flood insurance? I don't but I am thinking maybe I should start at least consider adding it to the menu of services. I haven't bought my own policy yet but I'm really considering it since I can get a preferred plan.

Does anybody have any opinions?

[NYC Willis AE]

Bobson - as with anything in life, there are + and - to any answer.

Selling Flood insurance is a volume business. Premiums are low, but the commission from the carriers can be 20% or higher, so you can build a decent "flow" over time.

Many property owners in designated zones - particularly those with collateralized loans - will already have been required to get the coverage by their lenders. But still we read that many folks are uninsured, so they may have lazy banks or the banks are only insuring the outstanding value, or they may have paid off a loan.

Flood is really quick and easy to quote online with a little practice, so the rating is fast. And since you cannot bind without payment, you won't get stuck by a new client, nearly guaranteeing you your income.

Garden apartment complexes with local management are great to quote, because each building has to be insured separately.

Residential buyers need to be told that most areas below grade (basements etc) are not typically covered for contents, so a flooded boiler in the basement might not be insurable. Be careful as you don't want to be stuck paying a loss yourself.

My suggestion is to get set up with an NFIP writer with online rating capacities, check your local flood maps, find an area within a 500 year zone, and plaster the neighborhood. Start with the commerical properties and apartment building owners (not condos), then shift to residences and condo owners. If you have a friend or two at a bank, get referrals.

Flood maps have been redrawn in many areas. Sell prospects on the perceived problems of global warming causing more severe weather swings - heavy snows in the North, heavier rains everywhere. Remind them that many policies exclude Flood, or carry such high deductibles that are designed to dovetail with maximum NFIP limits.

To paraphrase, "There's gold in them thar flood plains"!

[pita3333]

Personally I think that rather than ask if you "should" sell flood coverage...you should be asking yourself "why the heck have I not been protecting myself by offering flood coverage?".

If you are providing homeowners/tenants coverage, you should at the very least be making your clients aware of the availability of the coverage. It does not take much time to determine if they are in a flood zone...in the situations where they are...propose coverage with a premium indication and let them either accept or decline.

Similar applies to commercial lines....offer and let them decline the coverage. Then do it again at the next renewal...and the renewal after that and the renewal after that. You could start out with a blast marketing effort to each client "did you know that your policy does not cover flood? What is flood?" If you do this ... I suggest rather than sending to all of your clients at once, do it in stages..a certain number each week. This way you can easily handle the inbound queries that should follow this type of effort.

Bottom line...not offering the coverage puts you at risk, especially if they are in a flood zone. If you do not want to do this, then at the very least....buy yourself higher E&O limits!

[pita3333]

Just saw an article on this subject ... note the comment from an attorney:

“They say ‘okay just sign here and you’re insured,’” he told the station, adding that insurance
agents have an obligation to inform clients about the National Flood Insurance Program run
through FEMA. Failure to do otherwise, he stated, is malpractice."

http://ifawebnews.com/2010/05/07/anger- ... s=linkedin

[volstrike3]

I am based in Sacramento so Flood is a big profit center for my agency. We include a quote with every HO and commercial property quote. 27% commission on low maintenance policies is a good thing. Marketing excess flood opens door to high end home owners that live near the water.

[Brenda H]

We a don't have a lot of flood insurance in our agency, as most don't want it if they aren't required to have it by their mortgage company. We have sent out a letter to all of our homeowners clients stating that it is not covered under their home policies to CYA, but, we had absolutely no response to the letters. Best thing to do is quote it when you write a new home and make sure to get a sign off if client does not want it. CYA CYA CYA!!!

[volstrike3]

NFIP has a lot of slick marketing material (all free to you) including sign off sheets and big stickers that can be attached to the dec page stating"this policy does not cover flood".

[bobson]

Thanks everyone. When quoting a home do you seperate the premiums, or do you roll it up in one package?

[gregcw]

Thanks everyone. When quoting a home do you seperate the premiums, or do you roll it up in one package?

Do you roll up the premiums in "one package" when you are quoting Home and Auto with the same carrier? I suspect that you break the premum up by policy or coverage. However if you do roll up the total premium as a package premium when the policies are with the same company, I do not feel that including the flood premium in the Package is correct because the policies are not with the same company. However if you are listing the policies separately with a total premium i.e.
Podunk Mutual- Auto $1,500.00
Podunk Mutual- Home $ 750.00
HIgh & Dry Ins.- Flood $ 350.00
Total Premium $2,600

If Podunk Mutual is also a write your own flood underwriter it would probably be o.k. Otherwise I think that you run the risk of the customer thinking that all of the coverages are with one carrier. I think that could lead to a degree of misrepresentation, or at least a mis-understanding by the insured.

[volstrike3]

I quote flood and umbrella on every account but list them separately from the home and auto.