A new study has revealed that more than 90% of homes in New Jersey and New York could have more affordable premiums with private flood insurance.
Conducted by consulting and actuarial firm Milliman – in collaboration with Risk Management Solutions – the new study shows what a private flood insurance market would look like in both states. The study modeled premiums for most single-family homes across the two states.
“Hurricanes Harvey and Irma just last year, and Sandy before them, demonstrated the devastating financial effects flood can have on those who are not sufficiently insured,” remarked Milliman principal and consulting actuary Nancy Watkins.
Watkins, who also co-authored the study, said that the report shows how a private insurance market could work in conjunction with the NFIP to not only reduce premiums in both states, but also to provide more choices and increase coverage for consumers.
The key findings of the report include:
“As demonstrated in this study, an established private flood market brings with it many benefits, including the opportunity to close the insurance protection gap in the United States,” commented RMS Americas Climate Models product manager Holly Widen.
Widen explained that while there are “ample opportunities” for private insurance companies to offer competitive flood coverage in the market, a “strong understanding of the underlying flood risk is critical to maintaining their profitability.”