The flood insurance landscape has undergone significant changes in recent years, according to Dana Sutton, assistant vice president and Atlantic region flood practice lead at NFP.
Based in coastal North Carolina, Sutton has built her expertise on flood insurance through years of working with coastal and beach properties, which she described as a natural progression into a specialized focus.
“There have been major legislative changes with the National Flood Insurance Program (NFIP) and substantial growth in the private market,” Sutton said in conversation with Insurance Business.
These changes, coupled with a growing need for flood insurance, reflect the increasing frequency of flood losses, which she attributes in part to climate change. Sutton noted that these losses are occurring in areas that previously had minimal or no history of flooding.
Recognizing these shifts, NFP developed a dedicated flood practice to address what Sutton described as a need for more comprehensive strategies to insure against flood risks. This initiative, she explained, is designed to better serve clients facing evolving flood exposures.
Sutton emphasized the critical role insurance agents play in educating clients about flood risk. She pointed to a study by North Carolina State University’s Geospatial Analytics Department, which found that 84.5% of flood losses occur outside special flood hazard areas (SFHAs).
“We’ve allowed decades of the NFIP’s rating methodology to drive the narrative of flood exposure,” Sutton said. “There’s this notion that you’re either in a flood zone or you’re not. And if your lender doesn’t require coverage, you don’t need it.”
She argued that this perspective is outdated and leaves many homeowners vulnerable. Sutton urged agents to shift the narrative and communicate that flood risk exists for anyone living in areas where it rains.
She added that the reliance on flood zone maps, many of which are outdated or politically influenced, has contributed to a false sense of security among homeowners.
Sutton highlighted the devastation caused by Hurricane Helene in western North Carolina as an example. “Most of those impacted didn’t have flood insurance,” she said, citing reports that outdated flood maps failed to account for the actual risks in the region.
The NFIP, established decades ago, initially filled a gap left by insurers who lacked the ability to underwrite flood risk. Sutton acknowledged that the program served its purpose at the time but said that advancements in technology and data now allow for more accurate assessments and broader coverage options.
Recent legislative changes, including the introduction of Risk Rating 2.0, mark a shift in how the NFIP calculates premiums. Sutton said that the NFIP has moved away from using flood zones as the primary basis for rating policies, recognizing their limitations.
“Even the NFIP now acknowledges that flood zones are not an accurate assessment of risk,” she said.
These changes have also opened the door for private insurers to enter the market. According to Sutton, there has been a significant increase in private capital and technological advancements that make it easier to quote, issue, and administer flood policies.
“Ten years ago, the private flood market was almost non-existent,” she said. “Now, it’s much easier to access private flood insurance, and the coverages being offered are often broader than what’s available through the NFIP.”
Sutton described how the private flood insurance market has evolved, overcoming barriers that once limited its competitiveness. Previously, private insurers struggled to match the federal subsidies backing NFIP policies. However, advances in data analytics and underwriting technology have made private flood insurance a viable alternative in many cases.
“Today, I’m writing significantly more private market flood policies than NFIP policies in many states,” Sutton said. She noted that private insurers are increasingly able to provide customized solutions and broader coverage options that appeal to homeowners seeking alternatives to the NFIP.
Despite these advancements, Sutton acknowledged that the NFIP remains an important option for many properties, particularly those in high-risk areas where private insurers may still be cautious about underwriting policies. However, she stressed the importance of evaluating all available options to ensure adequate coverage.
Looking ahead, Sutton emphasized the need for continued efforts to educate homeowners about the realities of flood risk. She argued that agents must take a proactive approach, addressing misconceptions and providing clear information about the risks posed by flooding, regardless of a property’s location.
“The misconception that ‘I’m not in a flood zone, so I don’t need coverage’ is something we, as agents, have to challenge,” Sutton said. “It’s our responsibility to help clients understand their true risk and the options available to them.”
As flood risks continue to evolve, Sutton believes that both the public and private sectors have a role to play in addressing coverage gaps and ensuring that homeowners are better prepared for future flooding events.
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