After introducing coverage in Florida last month, a new provider of private flood insurance is expanding its services in the South.
Assurant Inc. announced this week that it will begin offering its primary flood insurance product to Texas homeowners. The group offers structural coverage up to $800,000 and contents coverage up to $250,000, not subject to federal fees or surcharges currently in place through FEMA’s National Flood Insurance Program.
The policy is available for customers with properties in flood zones “A” and “Z” – those considered by FEMA as most vulnerable to flooding.
The entrance into the Texas market follows Assurant’s debut in Florida, where it offered the coverage exclusively through licensed agents and began planning to roll out to other states.
Although interest in exploring the private flood market has risen among insurance carriers, a report earlier this month from Standard & Poor’s Financial Services suggests it may not be as high as agents and others in the industry wish
S&P points to the continued failure of NFIP to charge actuarially sound rates, a lack of accurate flood maps and outdated modeling techniques as stumbling blocks to the development of a robust market.
“At this point, we don’t expect a wave of private insurers to sweep into this market but rather a trickle as insurers would enter cautiously before they become more comfortable with the risks involved,” S&P concluded.
