In the wake of Hurricane Gonzalo pummeling Bermuda and tropical storm Ana passing Hawaii and it seems appropriate to discuss the relevant coverages and exposures related to these tropical disasters.
In Hawaii, most homeowners and renters must purchase hurricane, flood and earthquake coverage separately to protect themselves from those specific natural disasters, and to supplement their home insurance policy. A hurricane is defined as a tropical storm which has achieved sustained winds of at least 74 miles per hour. Most homeowners’ insurance policies in Hawaii provide coverage for almost all standard perils (e.g., fire, theft, tropical storm) but exclude hurricanes.
Most U.S. natural disasters involve flooding, and standard homeowners and renters policies do not cover flood-caused damage. Only a flood insurance policy, available through either the federal government or some private insurers, can protect a homeowner, renter or business from the flooding a tropical storm causes.
If it’s a NFIP (National Flood Insurance Program) policy that we place we’ll go ahead and file the claim with the NFIP carrier,” explains Dave Williams, executive vice president of
Risk Placement Services. “As far as hurricanes go, it looks like there will be nominal effect from Ana and it looks like Bermuda come through ok as well, moving forward as the increases in the NFIP rates continue to go up there will be more and more resources put out there to try and provide alternatives to the NFIP. It’s really going to be a matter of if the rating levels are getting to that point where the commercial marketplace thinks they can get in and provide a reasonable limit for a reasonable price.
“I think it is a very interesting area and when you’re dealing with the NFIP it may seem like everything is ‘cookie-cuttered’ but each risk is separate,” Williams continued. “That’s the thing with flood going into the future with the changes in our climate I think it is going to continue to be a larger and larger area that insurance companies will continue to have a harder time trying to get their hands around. I think there is going to be a lot of opportunity for the commercial marketplace if they can get the right price. What we see many times is people interested in getting excess flood coverages but when they find out what it’s going to cost, unless they’re forced to do it, then they typically won’t buy.”
You may also like:
"
Insurer launches new environmental M&A product"
"
Energy coverages sweep the US"
"
The hurricane insurance hitch Americans don't understand"
