Private flood insurer expands to 14 states

A private alternative to unaffordable NFIP policies for severely affected clients is now available to producers in 14 states.

Catastrophe & Flood


As Congress bickers over legislation postponing impending increases of flood insurance premiums, one Florida insurer has taken the lead in providing a private market solution for those hurt most by the steep rate hikes.

The Flood Insurance Agency (TFIA), a Gainesville, Florida-based carrier, kicked off its Private Market Flood program in November. Underwritten by surplus lines carriers at Lloyd’s of London, the program is targeted toward “the 2% of existing policyholders severely affected by Biggert-Waters,” says TFIA CEO Evan Hecht.

“When you have a large national program, there’s going to be a small percentage of people who kind of fall between the cracks,” Hecht said. “Right now, we’re trying to help the people that fell between the cracks.”

The insurer does so by working off different actuarial assumptions than those used by FEMA. While Hecht believes the rates FEMA has put into place are sufficient for most policyholders, his group is focused on charging an “adequate, fair price” for those suffering sky-high rate increases—sometimes up to 1000% or 3000%.

The actual policy provides $250,000 in coverage for property damage and $100,000 for contents, and does not require a flood elevation certificate. The policy language is very similar to what is offered through NFIP, Hecht said.  

Producers who are struggling to find solutions for clients can get in on the action as well.

“Independent agents are encouraged to sign up and register with us to sell the program,” Hecht said. “Currently, two-thirds of policies are being sold by agents.”

Venturing into the flood insurance space has been a huge success for the group. TFIA has already insured roughly $30mn of property in Florida and currently operates in 14 states—some of which were just added to the insurer’s roster this week.

“It’s been one continuous, takeoff launch. It’s like a rocket ship,” said Hecht, who has sold NFIP policies since 1975. “We started in Florida, we added Indiana on Saturday, and added Georgia just this morning, so it’s going very, very well.”

TFIA also plans to expand its offerings. Hecht told Insurance Business the group was granted a second contract with the Lloyd’s underwriters to offer flood insurance to the multi-family residential and commercial structure markets.

Hecht stressed that his group is not attempting “bash” NFIP; rather, he hopes to “keep the program healthy” by offering increased competition.

“I expect and actually hope that we have competition because my belief is that the private market will not allow people to pay more than they should pay,” he said. “I’m not bashing the NFIP. In my own little way, I’m trying to support the NFIP program.”

TFIA currently sells policies in 14 states, including Alabama, California, Connecticut, Indiana, Louisiana, New Jersey, Ohio, Pennsylvania, South Carolina, Texas, Virginia and Wisconsin.

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