Private insurers taking on government-backed flood insurance program

Two private companies are offering flood insurance policies to homeowners as an alternative to the National Flood Insurance Program, which is in the process of  implementing controversial rate increases that are expected to affect 20 percent of flood policies nationwide, the St. Petersburg Tribune reports.

A Gainesville, Fla.-based company, The Flood Insurance Agency, is writing policies in Florida and 14 other states that are backed by a syndicate of Lloyd’s of London. Tampa-based Homeowners Choice Property & Casualty Insurance Company recently signed its first flood policy in Florida.

Last week, in a 67-32 vote, the Senate passed a bill to delay premium increases. But the bill’s prospects in the Republican-controlled House are uncertain. House Speaker John Boehner and House Financial Services Committee Chairman Jeb Hensarling don’t support the bill, the Tampa Bay Times reports.

Congress had previously delayed premium increases for existing homeowners that were scheduled for later this year. But when properties change hands, the new owners must pay the higher rates, which are intended to better address flood risk.

Evan Hecht, CEO of The Flood Insurance Agency, tells Claims Journal that his company’s flood insurance policies will help facilitate sales of properties facing premium increases under the government program, but that it’s not his intention to insure homes at high risk of flooding.

“If you have a frequent flooding risk, we’re not the answer,” Hecht said. “This is for older homes, predominantly homes with basements. We’re an attractive option for them.” Source: claimsjournal.com.

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