This year’s flood season has the potential to create unprecedented havoc. Forecasters are expecting a severe season with several named storms and hurricanes, causing unmitigated damage and costs to communities already facing the difficulties of COVID-19. Indeed the first named storm of 2020, Tropical Storm Arthur, arrived well before the official June 01 start of hurricane season, and experts are noting that they are seeing similar conditions, such as warm waters in the Atlantic, the Caribbean and Gulf of Mexico, to the storm-ridden 2005. Property owners face significant out-of-pocket expenses for uninsured losses with risks they are potentially unaware of or ill-equipped to manage.
Furthermore, COVID-19 has created financial hardships for many Americans. This in turn means that people might not be willing or able to spend an additional amount of money on a flood insurance policy right now because they financially can’t manage it. As a result, noted Courtney Guss, director of training and agent development at NFS, which is the leading provider of flood solutions in the US, “You have people who should be insured who maybe are not purchasing policies, and then people who are currently insured not renewing policies at a much larger rate.”
Indeed, if a severe storm does hit, much of the country is still sheltering from the impacts of the coronavirus, which could intensify the risks that people already face during the storm season.
“People are sheltering in place at home due to COVID-19 and could potentially be displaced due to major hurricanes,” said Guss. “It’s a perfect storm of what to do with everyone if [a significant event] were to happen.”
For example, when residents of Florida typically evacuate, hundreds of thousands of people hit the road and head away from areas in the path of the storm. However, in the current environment, this movement presents a risk of spreading the virus, not to mention that certain states still have interstate travel restrictions in place, making evacuation more difficult.
In this environment, insurance agents play an important role in preparing their clients for the storm season by continuing the conversation around the importance of flood insurance. While it’s a tough time to bring up the purchase of a policy, there are a few ways agents can broach the topic of flood risk and relevant insurance coverage.
First, agents can use risk assessment tools to provide a customer with risk data relevant to the area they live in, as well as the average claims size for that area so the customer understands the full scope of their risk. Agents should also offer up information on flood risk and related insurance coverage frequently in the lead-up to hurricane season while reminding customers that policies take 30 days to take effect. They can likewise let policyholders know that if they have a specially rated policy and they allow the policy to lapse, they could potentially lose special discounts and rating.
To help agents in this effort, NFS has created an agent-focused toolkit around retention in the midst of COVID-19. Here, agents can access retention-focused webinars, watch short-form retention videos, and download customizable agent marketing templates.
“We’ve provided free social media and email templates as well as digital postcards that they can add their agency information to, and provide marketing and sales material out on their own Facebook or Instagram pages, as well as email blasts out to customers,” explained Guss. “We’re giving them free plug-and-play marketing materials because agencies typically don’t have the resources to create that on their own. Those materials include everything from personal lines to commercial policies.”
NFS will continue to refresh these templates throughout the season so that the messaging reflects conversations that agents should have with the insureds. For instance, as the summer progresses, templates will highlight the need to prepare for hurricane season and why it’s important to have a flood policy in place beforehand.
“It’s important for agents to recognize how to make the conversation relevant to customers,” said Guss. “People have a hard time imagining that this is something that will happen to them and it does happen – it’s the number one natural disaster in the United States. It’s our job to make sure that we speak on it in a way that makes sense to the average person.”