The Home Insurance Guru

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 954-606-5660 at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

A Senate committee next week will take up a potentially far-reaching bill that would make changes in Florida’s property-insurance system.

The Banking and Insurance Committee on Tuesday will consider a measure (SB 76), filed by Chairman Jim Boyd, R-Bradenton, that seeks to reduce attorney fees and litigation in property-insurance disputes and limit the costs of claims for roof damage.https://products.gobankingrates.com/r/d9360ea31bf06ea8b9d0ef49288e28fb

The measure comes after regulators last year signed off on dozens of double-digit rate increases for private insurers and as homeowners’ policies flooded into the state-backed Citizens Property Insurance Corp.

Insurers point to issues such as litigation and a surge in roof claims as helping cause financial problems in the industry. Boyd’s bill, in part, would try to reduce attorney fees by limiting what are known as “contingency risk multipliers.

Florida allows plaintiffs to collect attorney fees when they prevail in cases against insurance companies, with the amounts typically set by a calculation of the number of hours spent on a case and a reasonable hourly rate. But courts also can approve contingency risk multipliers that increase the fees.

Under the bill, however, contingency risk multipliers could only be awarded “in a rare and exceptional circumstance with evidence that competent counsel could not be retained in a reasonable manner.”

Also, the bill would try to reduce costs for roof claims by, in part, allowing insurers to use what is described as a “roof surface reimbursement schedule.”

Under the proposal, reimbursements could vary based on ages and types of roofs. For example, insurers would be required to provide full replacement coverage for roofs less than 10 years old. But they would be allowed to provide less coverage for other roofs.

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 954-606-5660 at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

This ‘hidden’ industry is often overlooked by college graduates, but it offers variety, financial security and the satisfaction of helping people when the unexpected happens.

• ANNIE BUELOW AND JOSEPH ROSARIO
• FEBRUARY 2021
• LINKEDINTWITTEREMAIL

When searching for a rewarding career, every professional should consider the insurance industry because of all of the benefits and opportunities it affords.

Unfortunately, however, this message can be difficult to advance. Consider you’re an insurance underwriter explaining your career to family or friends, whose response is eyes glazed over. Most people won’t understand, don’t care or will run away, thinking you’re about to sell them something.

Insurance often feels like a hidden industry, overlooked by college graduates and young professionals. Many people typically discover the field later in their careers. This is particularly unfortunate given the wealth of opportunities in an industry that, according to the Insurance Information Institute, is looking to fill about 400,000 positions “at all levels, and in all areas,” with a fresh pool of talent.

Admittedly, the industry can be overwhelming with its vast variety of roles that fall under the insurance umbrella. From marketing and claims management to risk analysis and sales, countless positions offer not only the ability to earn a good living, but the opportunity to challenge oneself and expand skill sets on a daily basis.

For example, as an underwriter of professional liability insurance in the construction market, you could one day be in the office doing investigative work to analyze a contractor’s risk profile, and the next day be on-site watching a project move forward with the help of a policy that enabled the contractor and owner to overcome potentially debilitating losses.

The insurance industry offers the potential for great professional growth—and the privilege to positively impact individuals, businesses and communities when unpredicted events happen.

Where to Start

Culture is everything. Walking into a large insurance company or even a niche brokerage firm for the first time can be confounding.

There’s the language—in which policy terms, conditions and exclusions can differ greatly among the many carriers, even if they serve the same market. There’s the dynamic relationship between insurance carriers, brokers, prospects and policyholders. And there’s the individual business style for each carrier and broker, all of whom are governed by a strict set of guidelines and regulations.

That’s why culture is especially important for those who are either new to the field or starting their first job after school. Finding an educational, rewarding and supportive atmosphere is essential to learn, grow and succeed.

The entire situation can be a bit daunting without the proper training and mentoring. The need to ask questions, to be heard and to receive answers from both colleagues and managers is fundamental to feeling valued and psychologically safe. It also is important for finding your place within an industry that employs 2.8 million people doing everything from handling claims to creating innovative products for clients.

And while there really isn’t a clear-cut pathway to success, a business degree supported by courses in data analytics and risk management is an ideal starting point. Middle Tennessee State University, Saint Joseph’s University, Temple University and University of Georgia were the leading colleges for insurance and risk management programs according to Best’s Review’s 2020 survey of industry professionals, including hiring managers and human resources professionals. There also are other institutions of higher learning to consider.

However, a solid education is only a stepping stone for ongoing growth in a field that is constantly evolving. Be prepared to start fresh in an environment that often feels like you’re learning a foreign language. The learning curve can be steep and the shortcuts few, but there are steps to help you create a skill set that will be in demand for years to come.

From marketing and claims management to risk analysis and sales, countless positions offer not only the ability to earn a good living, but the opportunity to challenge oneself and expand skill sets on a daily basis.

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Follow Your Interests

Many college programs, including those offering business degrees with a major in insurance or risk management, include internships at companies big and small. This is the time to get a real sense for the industry. Are you interested in sales and working as a broker? Or analyzing risk as an underwriter? Would you be more comfortable in marketing, finance, human resources or customer service? This is the time to get a taste of the many opportunities that exist in this industry. Insurance companies are constantly searching for trained, experienced and dedicated professionals to fill a multitude of roles.

We are underwriters in construction-related insurance. That’s just one of the many specialty markets within the industry. Some form of insurance protects nearly every business imaginable, and this doesn’t even take into account traditional personal lines—such as homeowners, health, auto—that help individuals overcome challenges every day. Insurance is present in almost every industry, so follow your interests to find the niche market you’d like to pursue.

To become a specialist in an area of interest, familiarize yourself with the diverse roles within a particular organization. Be hands on. Learn as much as possible about the product and the policy forms from both the insurer’s and insured’s perspectives

For those already employed in the industry, the advice and insights of insurance professionals outside your company can be invaluable, as these people can help you expand your knowledge of the marketplace and the needs of the businesses and clients they serve. Also, participate in associations that represent the many facets of insurance as well as the markets where you work.

This industry favors autonomy, so being self-sufficient is essential. Much of the work can be done over the phone, by video call or through email. Understand that relationships can be just as important as in-depth knowledge of a policy’s terms, conditions and exclusions.

Maybe it’s the word “insurance” or just the connotation, but few realize that this industry—never static, filled with opportunities for growth and education—can be the ideal destination for those looking for a rewarding position that makes a difference.

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 954-606-5660 at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

• Flood insurance is not included in standard homeowners insurance policies.
• You’re only legally required to have flood insurance in a high-risk flood zone, but the majority of flooding in 2020 happened outside of flood zones.
• One inch of flood damage alone can cost a household up to $US20,000.
• Visit Personal Finance Insider’s homepage for more stories.

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Flood insurance is not required for homeowners unless they live in a high-risk flood zone. However, the majority of homeowners who experienced flooding in 2020 did not live in flood zones and were not covered under their homeowners insurance. According to FEMA, 30% of all flood damage claims happens in low to moderate-risk zones, where flood insurance is not required.

“Flooding is one of the most common and costly natural disasters in the US, and given we are in the midst of an above-average hurricane season, consumers need to ensure that they will not be left exposed if their homes are hit hard by a storm,” said Ralph Blust, CEO of the National Flood Services. NFS administers flood insurance on behalf of FEMA and the National Flood Insurance Program (NFIP).

Blust told Insider many homeowners believe they are prepared for a flood, but the reality is that only 12% actually have flood coverage. He said homeowners need to understand how, or if, flood damage is covered under their current insurance policies, especially if they are in a hurricane area.

What is flood insurance?

Flood insurance is an addition to your homeowners insurance policy that can cover flood-related damage. A flood is defined as surface water entering the inside of your home structure through existing openings that are above ground level.

Blust noted that flood insurance specifically excludes water damage from sump pumps, sewer water, broken pipes, rain from an open window, and rain from windstorms.

Quick tip: Only about 14% of US homes are in areas that require flood insurance, but it could be still be worth it if you live outside a high-risk area. A standard homeowners policy will not provide any coverage for flood damage.

How is flood insurance different from homeowners insurance?

Homeowners insurance offers protection for homeowners’ belongings and for the home itself. Unlike car insurance, homeowners insurance is not required by state law. However, if you have a mortgage, your lender will require homeowners insurance to protect the investment.

Homeowners insurance covers the property from damage, referred to as insurance perils. A peril is an event that may damage your home or belongings, like theft, fire, or a storm. The type of peril coverage you have depends on the type of homeowners insurance you purchased. Common insurance perils include fire, lightning, theft, ice, snow, sleet, smoke, vandalism, and freezing.

Floods, earthquakes, government seizures, mudslides, ordinance updates, sewer backups, and sinkholes are all perils that won’t be covered by homeowners insurance, according to Hippo Insurance. Those will require add-on coverage using a rider policy.

DamageHomeowners InsuranceFlood InsuranceSump pump Yes* No Sewer water Yes* No Basement water Yes* No Broken pipes Yes* No Rain water from window or windstorm Yes* No Accidental discharge of water or steam Yes* No Flood No** Yes** Windstorm or hail Yes* No Ice, snow, sleet Yes* No

*Available as add-on coverage if not part of policy

**Flood insurance is available through the NFIP and approved insurers

For FEMA-backed flood insurance policies through the NFIP, there is no basement coverage. Flood insurance is only for water that comes in above ground level. Blust said that flood insurance offers virtually no coverage for homes with anything below ground— like basements.

Standard homeowners policies have water damage included, but for basements much depends on how the water got there. Was the water due to a frozen pipe or damage from improper maintenance of appliances and the home? He noted that NFIP provides little coverage for water floods from streets. Again, this may be covered under your standard homeowners policy for water damage, but check with your agent.

There’s a difference in how flood insurance pays out, too

Blust said that the flood insurance application process is more detailed and time-consuming than getting a homeowners insurance policy. He also noted that a flood insurance policy’s coverage is different from the coverage you get with a standard homeowners insurance policy.

Homeowners insurance policies typically use “replacement cost” when paying out for covered damage. Replacement cost is the cost to replace the item with a new or used product. However, flood insurance is based on the “actual cash value” (ACV) of property damaged. For example, if a leather sofa is damaged by flood, the actual cash value takes into consideration depreciation of the item. Actual cash value is usually lower than the replacement cost value.

Blust said that actual cash value is default for flood insurance policies, but you can request “replacement cost” value as an add-on. This should be done before signing your flood insurance policy, as it will increase your premium costs based on the difference between the replacement cost value and the actual cash value. It will vary based on the value of your belongings. It may require creating a home inventory and providing a list of the appraised value. However, it varies with flood insurance providers.

What is the National Flood Insurance Program (NFIP)?

FEMA created the National Flood Insurance Program (NFIP) in the 1960s because conventional insurers wouldn’t provide flood coverage to homeowners. This led to significant home foreclosures from flood damage. Blust said floods happen in all 50 states every year and the most catastrophic events with flooding are hurricanes — more than a river or levee.

FEMA uses flood maps that identify flood zones to provide coverage for homeowners. The FDIC requires homeowners to purchase flood insurance if you’re in the highest-risk flood zone. Flood zones vary based on region and locality. FEMA has a website for flood maps where you can enter your location and see what zone you are in. As weather patterns change, FEMA updates flood maps.

In the 1980s, FEMA allowed insurance companies to offer flood insurance known as “Write Your Own Flood” policies. Blust said that these programs are typically connected to FEMA, but outsourced. For example, National Flood Services is the largest flood service operator administered on behalf of insurers and FEMA.

Do you need flood insurance?

If you are in a high-risk flood zone, you’re required to purchase flood coverage identical to or better than what is offered by FEMA through NFIP. However, Blust said only around 14% of structures in the US are in a designated high-risk flood zone. Still, due to climate and weather changes, we’re seeing more storms and damage happening outside target flood areas.

Blust noted that although most homes are not in high-risk flood zones, homeowners are three times more likely to incur a water event than a fire event over the life of a home. Yet, only 12% of homeowners are covered for flood protection, while a larger number of homeowners have fire coverage.

Blust noted that homeowners have a false sense of security if there have been no previous floods. He said storms are increasing in frequency and intensity due to climate change — for instance, the typical pattern of hurricanes is changing.

For example, Blust said Hurricane Harvey’s damage to Houston was five miles off the coast, where it had never flooded in the past five years and most of those homeowners didn’t have flood insurance. If 20 homes were damaged and only five homes had flood insurance, it could greatly impact the community, with empty neighbourhoods and businesses that aren’t able to bounce back.

Homeowners who live outside of high-risk flood zones and do not have flood insurance will pay for damage out-of-pocket because flood damage isn’t covered under homeowners insurance. According to Blust, one inch of flood damage alone can cost a household up to $US20,000.

How much does flood insurance cost?

The average annual homeowners insurance premium in the United States in 2017 was $US1,211, according to the National Association of Insurance Commissioners (NAIC). Flood insurance will be an addition to your homeowners insurance policy.

Blust said the average cost of a NFIP policy is $US700 per year, which may seem like a high expense, but again, one inch of flood damage alone can cost up to $US20,000 to repair. He said the average flood premium is around $US830 annually from an approved flood insurance provider, but a preferred risk policy with a $US250,000 coverage limit is around $US500.

Factors that determine your flood insurance premium include proximity to water and whether or not the structure is elevated. The closer you are to water increases your rate.

How do I get flood insurance?

Due to the risk, most homeowners insurance providers do not provide flood insurance. Ask your homeowners insurance provider if they provide flood insurance. If not, you will need to get flood insurance through approved NFIP providers like the National Flood Services. Check the NFIP website for flood insurance providers.

If you are unclear about your homeowners insurance peril coverage, contact your homeowners insurance provider, especially if you live in disaster-prone areas. It is recommended that you review your policy coverage yearly.

Ronda Lee is an associate editor for insurance at Personal Finance Insider covering life, auto, homeowners, and renters insurance for consumers. She is also a licensed attorney who practiced litigation and insurance defence.

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 954-606-5660 at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

After holding off on approving its 2021 rates last month, Citizens Property Insurance Corporation’s Board of Governors has approved rate recommendations that the insurer says will make its rates more competitive with the private market to slow the flow of policyholders returning to the Florida’s insurer of last resort.

The Citizens Board approved rates recommendations for 2021 that call for a statewide average increase of 7.2 percent for personal lines policyholders – homeowners, condominium unit owners, mobile homeowners, dwelling, and renters. If approved by the Florida Office of Insurance Regulation (OIR), the 2021 rates would go into effect for policies renewed after Aug. 1, 2021.

Homeowner policies would increase by an average 6.1 percent. Condo owners would see an average 9.4 percent increase. Renters rates would increase 4 percent on average.

The board also approved a recommendation that new policyholders pay actuarially sound rates instead of joining the insurer with capped premiums that existing Citizens policyholders receive. If approved by OIR, the recommendation would increase rates for new business by an average of 21 percent. Florida State Senator Jeff Brandes had urged the insurer to make these changes as the Florida market tightens and policyholders flock to Citizens. A recent report commissioned by Citizens also identified the need for the insurer to make changes to the Citizens’ glide path for rate increases.

In a related vote, the board urged OIR to maintain caps for new business in Monroe County at 10 percent over the rate charged to renewing policyholders.

The moves comes as Citizens policy count over the past year has risen from 443,000 to 552,000, a 19.7% increase. Higher than expected losses from Hurricanes Irma and Michael coupled with stubbornly high litigation and reinsurance costs have prompted many private insurers to raise rates, limit coverage and exit particular markets.

“The objective here is to create a healthy, private insurance market in Florida that better represents what we are supposed to be, Florida’s insurer of last resort,” said Carlos Beruff, chairman of the Board of Governors.

In December, Citizens Board of Governors deferred action on a slate of 2021 rate recommendations that called for an average 3.7 percent increase in personal lines coverage, including a 2.2 percent increase in homeowners coverage. The board directed Citizens actuarial staff to work with OIR to address a growing disparity between Citizens rates and those charged by private insurance companies in many areas of the state.

Citizens is required by law to recommend actuarially sound rates, while complying with a legislative glide path that caps individual rate increases at 10 percent, excluding coverage changes and surcharges. Meanwhile, private insurers are receiving rate increases far in excess of the 10 percent cap, widening the premium gap between private insurer and Citizens policies.

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 954-606-5660 at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

TALLAHASSEE, FL – Citizens Property Insurance Corporation’s Board of Governors on Tuesday approved a pair of rate recommendations that make Citizens rates more competitive with private insurance company policies to slow the flow of policyholders returning to the Florida’s insurer of last resort. 

Board members on a 7-2 vote approved rates recommendations for 2021 that call for a statewide average increase of 7.2 percent for personal lines policyholders – homeowners, condominium unit owners, mobile homeowners, dwelling, and renters. If approved by the Office of Insurance Regulation (OIR), the 2021 rates would go into effect for policies renewed after August 1, 2021. 

Homeowner policies would increase by an average 6.1 percent. Condo owners would see an average 9.4 percent increase. Renters rates would increase 4 percent on average. 

The board then voted 7-2 to recommend that new policyholders pay actuarially sound rates instead of benefiting from the same capped premiums that existing Citizens policyholders receive. If approved by OIR, the recommendation would increase rates for new business by an average of 21 percent. 

In a related 6-3 vote, the board urged OIR to maintain caps for new business in Monroe County at 10 percent over the rate charged to renewing policyholders. 

Tuesday’s vote comes as Citizens policy count over the past year has risen from 443,000 to 552,000, a 19.7 percent increase. Higher than expected losses from Hurricanes Irma and Michael coupled with stubbornly high litigation and reinsurance costs have prompted many private insurers to raise rates, limit coverage and exit particular markets. 

“The objective here is to create a healthy, private insurance market in Florida that better represents what we are supposed to be, Florida’s insurer of last resort,” said Carlos Beruff, Board of Governors Chairman. 

In December, Citizens Board of Governors deferred action on a slate of 2021 rate recommendations that called for an average 3.7 percent increase in personal lines coverage, including a 2.2 percent increase in homeowners coverage. The board directed Citizens actuarial staff to work with OIR to address a growing disparity between Citizens rates and those charged by private insurance companies in many areas of the state. 

Citizens is required by law to recommend actuarially sound rates, while complying with a legislative glide path that caps individual rate increases at 10 percent, excluding coverage changes and surcharges. Meanwhile, private insurers are receiving rate increases far in excess of the 10 percent cap, widening the premium gap between private insurer and Citizens policies. 

Citizens has prepared a revised 2021 rate kit, which provides members of the media with information about its 2021 rate filing, including county-by-county estimates for specific policy types and frequently asked questions. 

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In 2002, the Florida Legislature created Citizens Property Insurance Corporation (Citizens), a not-for-profit alternative insurer, whose public purpose is to provide insurance to, and serve the needs of, property owners who cannot find coverage in the private insurance market. 

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 954-606-5660 at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

Before the chaos of 2020 set in, we kicked off the beginning of the new year in FRISS style with a great party to celebrate. It was full of joy and resounding excitement about what was sure to be an epic year. You already know how that turned out. As hectic as the year was, 2020 brought to light important work that needed to be done in the insurance industry and the importance of accomplishing that work quicker than planned.

With the beginning of 2021 upon us, I’ve found myself going through key industry perspectives for this upcoming year.

First, let’s discuss digital transformation. Having worked in this insurance ecosystem for more than two decades now, I can confidently say that digital transformation is no longer just a trend.

Covid-19 urged insurance companies to reinvent their ways of working. They found it essential to speed up digital processes to stay relevant and maintain customer satisfaction. According to a Gartner study of industry CIOs, Artificial Intelligence (36%), Data Analytics (21%) and Customer Experience (20%) will be the game changers for this year.

Most agree the customer should be at the center of everything an insurer does, and Aite Research reiterates that in one of their recent blogs. This goes hand-in-hand with digital transformation.  Senior analyst Stuart Rose notes that enhancing operations efficiency and making artificial intelligence more effective are key themes for 2021. Along with this, he acknowledges the importance of strengthening risk management, too.

In their 2021 insurance industry outlook, Deloitte also states that advanced data analytics and artificial intelligence are priorities for them this year. They write that insurance companies should actively start automating processes in underwriting and claims where possible.

Preventing insurance fraud with automated solutions

Next, it’s important to discuss how this will actually be implemented, and there is one major concern. When increasing automation through digital processes, insurance companies open the door to fraud. And unfortunately, as almost 500 insurance professionals noted in our 2020 Insurance Fraud Report, about 18% of all incoming claims contain an element of fraud. The Carpenters group believes this is expected to rise even further in the future as a result of the pandemic.

So how do we combat this? As indicated by Guidewire’s Laura Drabik, fraud detection should be fast and frictionless. She explains this in-depth in her 2021 predictions blog. Utilizing solutions that protect both the underwriting and claims processes is vital to a safe digital transformation. This can combine screening incoming policy requests, renewals and claims automatically. It also includes having the capability to flag suspicious claims immediately for further investigation. And, while these fraud analytics solutions are running in the background, insurers can confidently implement straight-through processing to create outstanding customer service. This “safe digital transformation” is designed to create a better experience for the vast majority of clients, the honest ones, while simultaneously maintaining control over processes.

Let’s make sure insurance stays a beautiful thing

Finally, according to Matthew Smith of the Coalition Against Insurance Fraud, we can only stay ahead of fraud through bold and innovative leadership. All of the trends described here point towards an even more digital future. Let’s leverage the momentum of this digital transformation and unite to make the worst epidemic in the insurance industry – fraud – a thing of the past. After all, we all believe… Insurance is a beautiful thing!

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 954-606-5660 at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

The COVID-19 pandemic has rewritten the global risk landscape in 2020, 2021 and beyond. As the pandemic rages on in the U.S. and around the world, the impacts of COVID-19 threaten to roll back years of progress on reducing social and economic inequality, climate action, and more.

Examining the global risk landscape of today, a new Zurich report shares the results of its latest Global Risks Perception Survey (GRPS), identifying and ranking the top risks by likelihood in 2021.

The “Global Risks Report 2021“ includes an analysis of the growing social, economic and industrial divisions in the U.S. and abroad, their interconnections, and their implications on society’s ability to resolve major global risks.

Researchers believe the factors of job losses, a widening digital divide, disrupted social interactions, and abrupt shifts in markets could lead to “dire consequences and lost opportunities” for large parts of the global population.

According to the report, the ramifications of COVID-19 and the major events of 2020, fueling “social unrest, political fragmentation and geopolitical tensions,” will shape the effectiveness of government and corporate responses to other major threats.

Threats to watch in the decade ahead

The Zurich Global Risks Report also rates risks according to when survey respondents perceive they will pose a critical threat to the world. Short-term threats (0-2 years) show concern with the immediate impact of the crisis on lives and livelihoods — among them are infectious diseases, livelihood crises, digital inequality and youth disillusionment.

In the medium-term (3-5 years), respondents believe the world will be threatened by knock-on economic and technological risks that may take some years to crystalize, such as asset bubble bursts, IT infrastructure breakdown, price instability and debt crises. Existential risks —weapons of mass destruction, state collapse, biodiversity loss and adverse technological advances — dominate long-term concerns (5-10 years).

For now, insurance professionals and risk managers should watch the top risks in the year ahead. In the slideshow above, discover the top 5 risks at hand in 2021, ranked by likelihood and impact.

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 954-606-5660 at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

Flooding is America’s number one natural disaster and as the highest “at risk” state in the country, Florida is the epicenter for all things flood insurance.

Since 1968, when procuring flood insurance, agents and homeowners have had virtually one option: FEMA’s National Flood Insurance Program. As of 2018, the NFIP had over 5 million policies in force nationwide with nearly 1.75 million policies coming from Florida. With advancements in technology and the increased availability of reliable data, private insurers have entered into the flood marketplace providing consumers with alternatives to the historical FEMA program.

The emerging private flood market brings many notable benefits to consumers across the country, but there are also a few concerns that come with it. Private flood insurance differs from the NFIP in three distinct ways: risk assessment, pricing and coverage. The process of evaluating flood risk is perhaps the most impactful difference to consider.

The NFIP rating model mainly takes into consideration the FEMA flood zone and the property’s elevation. A “flood zone” is a geographical area that is rated to reflect the severity and/or a specific type of flooding exposure. Flood hazard areas identified on FEMA’s Flood Insurance Rate Map are identified as a Special Flood Hazard Area (SFHA). An SFHA is defined as the area that will be inundated by the flood event having a 1% chance of being equaled or exceeded in any given year. SFHAs are labeled as A, AO, AH, A1-A30, AE, A99, AR, AR/AE, AR/AO, AR/A1-A30, AR/A, V, VE, and V1-V30. Moderate and minimal flood hazard areas are labeled B, C or X (Fema. gov).

While there are numerous flood zone categories, “Flood Zones” in nature are general and can include entire neighborhoods or sections of a city. On the contrary, private flood providers utilize “single risk modeling” to evaluate the specific and unique flood risk for each property individually. Private flood providers feel this approach is much more effective as it can more accurately assess critical exposures such as storm surge, fluvial flooding and pluvial flooding.

Unlike the NFIP, rates across the private marketplace strive to be actuarially sound, with each program using their own proprietary approach and strategy. This creates a true marketplace benefiting consumers and agents alike. Private flood programs reward properties that perform favorably in their models with competitive premiums, specifically designing their rates on these properties to be lower than the NFIP. This provides opportunity for Florida homeowners to save money and also creates sales opportunities for Florida insurance agents.

This same approach holds true in the opposite direction, resulting in higher private premiums than the NFIP on properties that perform poorly in their models. The concern being, what long term effect will this have on the already struggling performance of the NFIP? With more comprehensive risk evaluation and targeted pricing, private flood providers are essentially cherry-picking all the good risks from the NFIP — leaving behind the properties more subject to flooding.

In response to the substantial NFIP debt, and growing concern of private market “cherry picking,” the NFIP is rolling out “Risk Rating 2.0” which will take a more comprehensive rating approach utilizing improved technologies that are commonplace throughout the private sector. Risk Rating 2.0 is currently scheduled to be released in October 2021.

Enhancements to flood coverage and policy form is the last major category of note, and perhaps the most impactful of all. Historically, insurance professionals have been forced to accept the coverage limitations of the NFIP when providing flood insurance to their clients. With intelligent rating and competitive pricing, the private market also brings with it increased coverage limits and valuable coverage endorsements.

While the NFIP has maximum limits of $250,000 for building and $100,000 for contents for residential policies, the private marketplace offers limits in excess of $10 million for building and $1 million for contents plus additional endorsements such as other structure, additional living expenses, basement contents, pool repair and refill. The goal shared by insurance professionals and advocacy groups is to better protect Americans from the country’s number one natural disaster.

With advancements in technology, a growing flood marketplace and affordable intelligent pricing, we may finally have the resources needed to close the coverage gap.

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 954-606-5660 at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

Q: I got married in March and we now have a baby due in May. We have debt of $190,000 on our home mortgage. Should we purchase 20-year term life insurance or permanent life protection?  — No name given

A: Based on what you’ve told me, I would recommend buying the 20-year term for now as it will be easier on your cash flow with a new baby coming. You will have plenty of time in the future to convert the term to permanent life insurance protection (with no evidence of insurability requirement) should you have any unexpected life changing event. —  John Cash III

Q: Is there a safe place to put cash from a stock sale and get a good return? — R.A., Clermont

A: No, unfortunately not. It is a good idea to reduce your single stock, risk but the downside is the current low interest rate environment. Consider some tax-free bond funds as a diversified asset class. —  Dennis Nolte

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 954-606-5660 at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

First American Financial Corporation, a global provider of title insurance, settlement services and risk solutions for real estate transactions, announced that its property and casualty insurance subsidiaries have entered into book transfer agreements with Safeco, a Liberty Mutual Company, and Heritage Insurance Holdings. The agreements provide qualifying First American property and casualty insurance agents and customers an opportunity to efficiently transfer their policies to Safeco or, in certain circumstances, Heritage.

The entry into these agreements is the result of the initiation of a process by the company, announced in October of last year, to exit its property and casualty business and to maintain focus on its core business.

“Safeco and Heritage are leaders in book transfer arrangements and have a strong commitment to serving independent agents,” said Dennis J. Gilmore, CEO, First American Financial Corporation. “These agreements allow us to exit our property and casualty operations, while providing a valuable option for many of our agents and customers to move forward with established and well-respected carriers.”

The company expects the transfer to be completed by the end of the third quarter of 2022.