The new program enables insurers to set their own limits of insurance and provide optional coverage for risks not typically covered by the National Flood Insurance Program (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. The new program features actuarially sound 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, which is currently being reviewed by the U.S. Congress in anticipation of the program’s scheduled sunset on September 30, 2017.
“Recovering from a flood can be a major challenge for businesses because expenses can quickly escalate out of control. But underwriting commercial flood coverage is still new to many insurers, and they don’t have the tools needed to cover and price the wide range of risks that businesses face,” said Maroun Mourad, president of ISO - Commercial Lines. “Our new program can help insurers address complex coverage needs and achieve profitable growth in commercial flood insurance.”
Later this year, ISO plans to introduce similar solutions for the personal property market..
“The market for property insurance generally is highly competitive, and with an increased awareness of the potentially disastrous effects from the peril of flood, insurers will have the tools to offer more robust protections to their policyholders,” added Mourad.
Since 1971, ISO has been a leading source of information about property/casualty insurance risk. For a broad spectrum of commercial and personal lines of insurance, ISO provides statistical, actuarial, underwriting, and claims information and analytics; compliance and fraud identification tools; policy language; information about specific locations; and technical services. ISO serves insurers, reinsurers, agents and brokers, insurance regulators, risk managers, and other participants in the property/casualty insurance marketplace. ISO is a Verisk Analytics (Nasdaq:VRSK) business. For more information, please visit www.verisk.com/iso.
Giuseppe Barone/Erin Bzymek
MWWPR (for ISO)