[Liability Insurance] FW: The Looming Disaster from National Flood Rates

Mon Sep 16 09:21:56 PDT 2013

Folks,

Per the discussion on our call today, please see the article below written by Dick Tutwiler and the two news articles embedded in his article.

We would like to put together a CLE on this topic to be presented at the Executive Council meeting in Sarasota in November.  Please let me know if you have any thoughts or comments relating to the Bill and/or if you or anyone you know has experienced any issues related to the Bill.

Thanks,

[Carlton Fields]
Scott Pence
4221 W. Boy Scout Blvd., Ste. 1000
Tampa, Florida  33607-5780
Direct:  813.229.4322 | Fax:  813.229.4133

From: Wright, Wm. Cary
Sent: Wednesday, July 31, 2013 9:37 AM
To: Michael G. Meyer; Pence, Scott
Subject: FW: The Looming Disaster from National Flood Rates

From: Tutwiler-PublicAdjuster.com [mailto:tutwiler at publicadjuster.com]
Sent: Wednesday, July 31, 2013 6:00 AM
To: Wright, Wm. Cary
Subject: The Looming Disaster from National Flood Rates

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The Looming Disaster Over Flood Insurance Premiums
Our public adjusting firm, Tutwiler & Associates has been very busy over the last eight months dealing with Super Storm Sandy insurance claims. Those who were on the ground in the Northeast know that Sandy was a major flood event. Because the combined losses from both Sandy and Katrina far exceeded surplus and expected premium collections, the National Flood Insurance Program claims they are seriously in the red. Depending on whom you ask the shortfall may be in excess of $20 billion.
On the claims side of this issue, many policyholders with flood damage learned some very hard lessons on the coverage and payment limitations of the National Flood Insurance Program. From firsthand experience with our clients, to emails and phone calls, we have fielded questions and tried to provide answers, suggestions, solutions or options on this blog. Now, the other shoe has dropped on this federal insurance program and we want to provide our readers’ insight into the story which will be rolling out in more detail as flood premium notices hit the mail boxes of policyholders.
But first I want to make it clear that I have always been a big advocate of property owners buying flood coverage (including excess flood if warranted) if located in a flood zone or an area with flooding potential due to the flood exclusions that exist in almost all admitted and surplus lines property policies. The flood peril in this country is huge as you will see in the flood video below. And you don’t even need to be in a flood zone to experience a major flood loss. Stated another way, we have had clients far removed from coastal beaches who have sustained major flood damage. In fact, the flood policies will provide flood converge if two adjoining properties are flooded and/or two or more acres are flooded. Flooding can happen anywhere and you don’t have to be in a flood zone to buy this coverage.
My other reason for encouraging this coverage was that it was cheap compared to other property insurance sold in the private market. Now, this is all about to change and I predict this change will have a major impact on real estate values, particularly in coastal communities. More importantly, it will impact the financial well being of families who have to pay much higher premiums or forced to sell because they can’t afford the rate increases. And of course, those who decide to go without flood insurance take another type of financial risk.
How serious is this? As an example, we attended an event sponsored by a local real estate broker and large insurance agency last week. One realtor gave an example of a property that was under contract with a $25,000 deposit. When the prospective buyer heard about the new cost of the flood insurance premiums, they immediately walked away and gave up their deposit.
While some press coverage has been given to this pending maelstrom for property owners requiring flood coverage, See: Premiums Rising for National Flood Insurance Program<http://e2.ma/click/d4asl/p1stk/xnnqyc>, the facts of the proposed premium increases are just starting to leak out in bits and drabs.  This recent article Outrage as Homeowners Prepare for Substantially Higher Flood Insurance Rates<http://e2.ma/click/d4asl/p1stk/dgoqyc> lays out the impact and unintended consequences this situation is already having on flood policy homeowners.
So where did the authority come from to make these changes? It was an act of Congress with legislation called the Biggert-Waters Act passed in 2012. Apparently, without sound actuarial market rates, this program would not have be reauthorized and according to some, this would have been the end of the flood insurance program.
This video link provides some background and history on flood risk, the National Flood Insurance Program and attempts to play down the impact of these premium increases.  http://vimeo.com/67835375<http://e2.ma/click/d4asl/p1stk/t8oqyc>
Pass this along folks, the public needs to know what’s coming. Let me know where you think all this is heading.

[Florida Public Adjuster Insurance Claims]<http://e2.ma/click/d4asl/p1stk/90pqyc>

Dick Tutwiler
"When the prospective buyer heard about the new cost of the flood insurance premiums, they immediately walked away and gave up their deposit to purchase the home."

Tutwiler & Associates<http://e2.ma/click/d4asl/p1stk/ptqqyc>
Licensed Public Insurance Adjusters & Loss Consultants
Executive Office
5401 W. Kennedy Blvd., Ste. 757
Tampa, FL 33609

Florida License# A269833
Offices: Tampa, Hollywood, Palm City, Florida

info at publicadjuster.com<mailto:info at publicadjuster.com>  •  www.PublicAdjuster.com<http://e2.ma/click/d4asl/p1stk/5lrqyc>
Toll Free:800.321.4488  •  Phone:813.287.8090

Also licensed as public adjusters in: Georgia, Kentucky, Louisiana, New York, North Carolina, South Carolina, Tennessee, Texas, West Virginia, and U.S. Virgin Islands

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