HOUSINGNEWS REPORT
REAL ESTATE INSURANCE: FENDING OFF DISASTER IN A CHANGING WORLD
2018 NATURAL HAZARDS HOUSING RISK HEAT MAP VERY LOW VERY HIGH MODERATE HIGH LOW
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Coverage Adjustments First, coverage has to continue. The local economic damage from an end to the NFIP would be politically untenable. Second, one way to cut flood insurance losses is to have fewer policyholders. A poll by the Insurance Information Institute found that in 2016 “12 percent of American homeowners had a flood insurance policy, lower than the 14 percent who had the coverage in 2015.” Unfortunately, reducing insurance losses does not mean that future losses in general will go away or be smaller. Fewer insurance policies simply redistributes risk.
“Producing accurate flood maps should not be done by a single party and certainly not solely done by the U.S. government. I believe we would be better served by having a number of qualified groups involved in producing flood maps. The schedule for producing flood maps should be at least yearly.”
MARK GIBBAS PRESIDENT AND CEO, WEATHER SOURCE
Information Institute. “In recent years insurers have become increasingly comfortable with using sophisticated models to underwrite insurance risk, and modeling firms are getting better at predicting flood risk. “In 2017,” said the Institute, “direct premiums written for private flood insurance totaled $589 million, up 57 percent from $376 million in 2016. The number of private companies writing flood insurance increased to 33 in 2017 from 20 in 2016.”
crucial to required insurance coverage — have to get better.
Flood maps are notoriously out-of- date or simply inaccurate. As NPR reported in 2016 regarding New Orleans: “Overnight, more than half the population moved out of the so-called high-risk zone.” “The new maps are like a bureaucratic magic trick. At the stroke of midnight, the federal government waved its wand, and Friday morning more than
Third, expect private coverage to grow.
“Flood insurance had long been considered an untouchable risk by private insurers because they did not have a reliable way of measuring flood risk,” explained the Insurance
Fixing Flood Maps Fourth, flood maps — which are
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OCT 2018 | ATTOM DATA SOLUTIONS
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