Get to Know Your Clients

Clients have unique flood insurance needs – from retirees looking to protect the life they’ve built, to business owners looking to safeguard their livelihood.

At the same time, insurance is about trust. Your clients trust you to know them and what they need in homeowners, life, auto, liability, or other lines of coverage. By getting to know your clients and understanding their needs, you can build your business while building trust.

Spotlight on: New homeowners

Jeff Baugh purchased flood insurance to protect his new home and young family. For Jeff and other families like his, flood insurance is a small price to pay for peace of mind.

Making insurance decisions to protect a new investment is an important step in buying a home. That’s why it’s important for agents to work closely with new homebuyers and their real estate agents to help make sure clients secure the necessary coverage – including flood insurance.

Added bonus: Working with new homebuyers is an opportunity to create a long-standing client relationship.

Property owners in high-risk flood areas

Properties in the high-risk flood area (indicated as V or A zones on flood maps) have at least a one-in-four chance of flooding during a 30-year mortgage.

Clients in high-risk flood areas face real risk, so it is important to underscore the value of flood insurance compared to the cost of even a minor flood event.

Due to their risk, clients in high-risk zones will likely pay higher premiums and may be concerned about the affordability of flood insurance. Agents can help clients understand their premium costs, possible cost-savings options, and ways to reduce costs by mitigating their risk.

Flood insurance is required for homeowners and business owners who live in the high-risk flood area and have a federally backed mortgage. Check in with clients who are about to pay off their mortgage to ensure they continue to purchase flood insurance even after it is no longer required – it only takes a few inches of flood water to cause tens of thousands of dollars of damage to a home.

    • Securing flood insurance is a crucial step to protecting the life you’ve built.
    • If you are in a high-risk area and carry a federally backed mortgage, flood insurance is mandatory.
    • Homes in the high-risk flood area, like yours, have at least a one-in-four chance of flooding during a 30-year mortgage.
    • Just one inch of flood water can cause more than $25,000 in damage to a home, making flood insurance a small price to pay for peace of mind.
    • If you have questions about cost, there are some measures you can take – such as mitigation – that can lower your annual premiums.

Property owners in moderate- to low-risk flood areas

Many property owners in moderate- to low-risk areas (indicated as B, C or X zones on flood maps) mistakenly believe they’re not at risk for costly flooding, particularly if their community has not experienced a flood event in recent memory.

As agents, you can work with clients to dispel this common misconception. New construction can alter drainage patterns, rainfall can exceed yearly averages, or severe weather can quickly back up water during heavy rains, causing flooding in your area. What’s happened in the past is no guarantee of what will happen in the future.

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The good news for clients in moderate- to low-risk areas: most will qualify for a lower-cost Preferred Risk Policy (PRP), with costs as low as $325 a year.

    • Securing flood insurance is a crucial step to protecting the life you’ve built.
    • Flooding can happen anywhere at any time, and not always in high-risk flood areas. More than 20% of flood insurance claims are for properties outside the high-risk areas.
    • More than half of the homes and businesses damaged by the 2016 floods in Louisiana were in moderate and low-risk areas. 57% of Hurricane Harvey flood claims were from outside the high-risk area.
    • No matter what your risk is, you can purchase flood insurance. The only requirements are that your community participates in the National Flood Insurance Program (NFIP) and your property qualifies for coverage.
    • If you live outside a high-risk area, you might qualify for a lower-cost PRP, with costs as low as $325 a year .

Business owners and commercial coverage

Every year, thousands of businesses throughout the United States are affected by flood events.

For business owners, the cost of a flood event can be devastating. Just a few inches of water can damage walls and floors, wreck expensive equipment, ruin furniture, destroy supplies, and cost tens of thousands of dollars to repair. These repair costs are in addition to the loss of income that comes from a disruption to business operations.

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Did you know? Commercial property insurance does not typically cover flood damage. Only flood insurance does.

Because of this, far too many businesses end up having to close their doors or take on additional loans after a flood event. That makes flood insurance a wise investment for business owners. In moderate- to low-risk areas, basic commercial building and contents coverage can be purchases for as little as $564 per year.

Agents can help commercial clients understand the value of flood insurance to protect their livelihood and employees.

    • Flood insurance is a smart investment for business owners. From 2011 through 2015 the average commercial flood claim was nearly $90,000.
    • Floods can be emotionally and financially devastating events. At least 25% of small businesses never reopen following a disaster
    • Recover faster and more fully with flood insurance. The NFIP offers commercial policyholders building coverage for up to $500,000 and contents coverage up to $500,000.
    • Without this coverage, many business owners are forced to take out loans or pay recovery costs out of pocket – adding financial stress to your business.
    • Qualified business owners in moderate- to low-risk areas can purchase basic commercial contents and building coverage for as little as $564 per year, making flood insurance a good value for business owners.

Renters and contents coverage

Flood insurance isn’t just for homeowners. However, the flood insurance gap between homeowners and renters is significant. Renters comprise one fifth to one half of residents in many communities; however, contents-only policies – the most common type of coverage for renters – represents only 2% of NFIP policies.

Agents can work with renters to protect their valuables and personal property by purchasing flood insurance. Most traditional renters insurance does not cover flood damage. Only flood insurance can help renters protect the lives they’ve built.

Renters can buy a flood insurance policy to cover contents up to $100,000. Because most renters do not need to secure additional coverage for their building, their overall coverage is often more affordable.

    • Securing flood insurance is a crucial step to protecting the life you’ve built.
    • Flood insurance is available for renters. Protect your personal property and valuables with contents coverage from the NFIP.
    • Most traditional renters insurance does not cover flood damage. However, NFIP flood insurance covers your personal belongings up to $100,000.