ISO offers commercial flood insurance programReprints
ISO has launched a commercial flood insurance program that can insure risks not typically covered by the National Flood Insurance Program.
The new program from the unit of Jersey City, New Jersey-based Verisk Analytics Inc. enables insurers to set their own limits of insurance and provide optional coverage for risks not typically covered by the NFIP, including certain types of property damage to basements, business interruption and costs to comply with building code changes.
The coverage can be based on actual cash value or replacement cost value, with loss costs based on models developed by Verisk’s AIR Worldwide business and from ISO data.
Insurers can use the program to provide a primary flood policy or a flood policy providing coverage that is excess of the NFIP, with Congress currently considering proposals to reauthorize the program ahead of its pending Sept. 30 sunset.
“I think a lot of this uncertainty really starts to solidify the need for a private market solution,” said Marc Treacy, ISO managing director, flood insurance programs in Chicago. “With the appetite out there, I think now is the time.”
“Besides the appetite, there are more tools available,” he continued. “Now we have the ability to use probabilistic models to understand average annual loss and the loss costs from that. There are hazard tools out there. It allows the insurance companies and their underwriters to start looking further than what’s in and out of the (U.S. Federal Emergency Management Agency) flood zones. It allows them to start analyzing the risk and making risk assessments based upon their companies’ guidelines and decisions. I have clients that want to write the hazardous stuff. I have clients that don’t want to write the hazardous stuff. There will be solutions out there.”
ISO plans to introduce similar solutions for the personal property market later this year.