1 / 126

Ethics and the Insurance Industry

Ethics and the Insurance Industry. 100% Participation in Polling Questions is required to receive credit for this class. Even if you do not intend to receive credit, please participate in the polls. The webinar will begin shortly. There is no audio at this time.

borka
Download Presentation

Ethics and the Insurance Industry

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Ethics and the Insurance Industry • 100% Participation in Polling Questions is required to receive credit for this class. Even if you do not intend to receive credit, please participate in the polls. • The webinar will begin shortly. • There is no audio at this time. • This presentation is being recorded for your viewing pleasure at a future date. • The attendance and proctor forms are available under ‘Materials’ in the Webinar’s Console to the right. • The PowerPoint presentation is also available under ‘Materials’. • You will receive the course number for your state near the end of class. • Use the ‘chat’ window for questions on the content.

  2. Background on Flood Insurance Today’s Instructor: Casey Roberts, President Laurus Insurance Consulting www.laurusinsuranceconsulting.com

  3. http://www.floodsmart.gov/floodsmart/pages/media_resources/stats.jsphttp://www.floodsmart.gov/floodsmart/pages/media_resources/stats.jsp • Floods are the #1 most common natural disaster in the United States. • Over the past 10 years (2001-2010) the average flood insurance claim paid in the US was nearly $48,000 per year. • Over the past 10 years (2001-2010), flood insurance claims averaged just over $2.6 billion.

  4. http://www.floodsmart.gov/floodsmart/pages/media_resources/stats.jsphttp://www.floodsmart.gov/floodsmart/pages/media_resources/stats.jsp • The average flood insurance policy is about $600 per year. • People outside of high-risk areas file over 20% of NFIP claims and receive one-third of disaster assistance for flooding. • The NFIP paid $709 million in flood insurance claims to homeowners, business owners, and renters in 2010

  5. Facts For You And Your Customer • Floods and flash floods happen in all 50 states • Everyone lives in a flood zone • Flash floods often bring walls of water 10 to 20 feet high • Just an inch of water can cause costly damage • Each homeowners has a 26% chance of being damaged by a flood during the course of a 30-year mortgage, compared to a 9% chance of fire.

  6. Flood Facts • If home is in a Special Flood Hazard Area (SFHA) or high-risk area and have a Federally backed mortgage, the mortgage lender requires you to have flood insurance

  7. Covansys Vender (NFS, IMSG, ETC) Policyholder Adjuster Policyholder Adjuster

  8. How To Access Coverage

  9. NFIP LEGISLATION • National Flood Insurance Act Of 1968 • Flood Disaster Protection Act Of 1973 • National Flood Insurance Reform Act Of 1994

  10. FLOOD FACTS • NFIP program is self-funded • 5 million policies in force countrywide • $1 Trillion in insurance coverage • 70-80% of all natural disasters are flood related

  11. Myths about the NFIP • You can’t buy flood insurance if you are located in a high-flood risk area. • You can’t buy flood insurance immediately before or during a flood. • Homeowner’s policies cover flooding.

  12. Myths about the NFIP • You can’t buy flood insurance if your property has flooded. • Only residents of high-risk flood zones need to insure their property. . • Federal disaster assistance will pay for flood damage.

  13. Flood Policy verses Disaster Assistance Flood Insurance • Policyholder • Contractual basis for claims • High policy limits • Policy to pay claim • Victim Disaster Assistance • Application for aid • Lower limits • Disaster must be declared by the President • If eligible - loan or grant

  14. Why is Flood Insurance Needed?

  15. Policy Exclusions • Flood is a catastrophic exposure, • Standard Commercial Property, Business Income, Homeowner’s, Renters and Condo policies exclude flood, • A few non-standard policies, such as HPR and High-Value Homeowner’s include flood, but that is the exception rather than the rule,

  16. HO 00 03 Flood Exclusion 3. Water Damage Water Damage means: a. Flood, surface water, waves, tidal water, overflow of a body of water, or spray from any of these, whether or not driven by wind; b. Water or water-borne material which backs up through sewers or drains or which overflows or is discharged from a sump, sump pump or related equipment; or

  17. HO 00 03 Flood Exclusion c. Water or water-borne material below the surface of the ground, including water which exerts pressure on or seeps or leaks through a building, sidewalk, driveway, foundation, swimming pool or other structure; caused by or resulting from human or animal forces or any act of nature. Direct loss by fire, explosion or theft resulting from water damage is covered.

  18. How the NFIP Operates

  19. Community Participation • How does a community participate? • Submit application to FEMA • Meet minimum floodplain management requirements • What does non-participating mean? • No flood insurance available • No disaster assistance • No federal mortgage assistance in SFHA

  20. What is a Community? • Any political subdivision or entity that has the authority to adopt & enforce floodplain ordinances. • Such as: Towns, Cities, Counties & Tribes

  21. Eligibility

  22. Non-Participating Communities

  23. NFIP ProgramsEmergency and Regular Programs

  24. Two Programs

  25. Amount Of Insurance Available – Emergency Program

  26. Full Participation Actuarial Rates Higher Limits Available Flood Insurance Rate Map (FIRM) PROGRAM PHASES Regular

  27. Amount Of Insurance Available – Regular Program

  28. Community Rating System • Provides incentive for doing activities above the minimum requirements • To promote awareness of flood insurance • Recognition in the form of discounts – from 5% to 45%

  29. Community Probation • Non-compliance means $50 surcharge on all new and renewal policies • Probation lasts for 1 year

  30. Community Suspension • No new or renewal policies • No federal mortgage assistance in SFHA • No disaster assistance in SFHA

  31. Underwriting Information NeededMaps and Zones

  32. Community Status ListHow to Obtain • http://www.fema.gov/community status book • http://www.fema.gov/csb.shtm • Map Service Center 1-800-358-9616

  33. Definitions Pre-firm: Built prior to 12/31/1974 or before the effective date of the initial FIRM for the community whichever is later Post-firm: Built on or after the effective date of the initial FIRM for the community

  34. Flood ZonesSpecial Flood Hazard Areas • Zones beginning with A or V • A, A1-A-30, AE, AO, AH, A99, AR • V, V1-V-30, VE • Mandatory purchase applies • New maps will show A1-A30 as AE and V1-V-30 as VE

  35. Flood ZonesMinimal to Moderate Flood Hazard Areas • B, C or X • 25-30% of NFIP Claims come from these areas • New maps will show B or C as an X

  36. Base Flood • Common engineering standards • NFIP adopted baseline probability • 1% chance flood • One out of 100 chance of occurring in any given year (100 year flood)

  37. Flood Zone Determinations • Flood Insurance Rate Map • Zone Determination Company • Lender - Standard Flood Hazard Determination Form

  38. Base Flood Elevation (BFE) • The computed elevation in which floodwaters are anticipated to rise during the base flood. • Not a measure of time

  39. Identifying Flood Prone Areas • National Flood Insurance Act of 1968 directed FEMA to: • Identify all flood prone areas within the US • Establish flood-risk zones within flood prone areas

  40. Special Flood Hazard Area • Land area which is covered by floodwaters from the Base Flood • SFHA area where Floodplain Management Regulations must be enforced by the community • Mandatory flood insurance purchase requirement • Zones Beginning with “A” or “V”

  41. NATIONAL FLOOD INSURANCE PROGRAM NATIONAL FLOOD INSURANCE PROGRAM FIRM FLOOD INSURANCE RATE MAP FIRM FLOOD INSURANCE RATE MAP CITY OF FLOODVILLE, California PANEL 0001 OF 0004 CITY OF FLOODVILLE, California MAP INDEX COMMUNITY-PANEL NUMBERS 060001 001 C MAP REVISED MAY 16, 1994 Federal Emergency Management Agency COMMUNITY-PANEL NUMBERS 060001 0001-0004 MAP REVISED JUNE 5, 1996 Federal Emergency Management Agency

  42. Basic Elements of Flood Maps: The Panel

  43. Sample Map Index 0001C 0002B 0004D 0003B General Area of Property

  44. FIRM Panel 0001C - General Location Sutter Blvd. Fort Ross Ave. ZONE AE Monterey Ave. 532 X RM1 531 ZONE X E D Vallejo Ave. Sonoma Ave. Green River CORPORATE LIMITS LIMIT OF DETAILED STUDY 530 ZONE X 529 Fremont St. C Larkin St. Bidwell St. 528 ZONE A Alvarado Ave. B A

  45. Coastal Barrier Resources System The CBRS is a system of protected coastal areas that includes ocean-front land, the Great Lakes and Other Protected Areas. These barriers serve as important buffers between coastal storms and inland areas, often protecting properties from flood damage. Structures built after 10/1/1983 are not insurable.

  46. Letters Of Map Change • Letter of Map Amendment (LOMA) • Letter of Map Revision (LOMR) • If eligible, structure removed from SFHA, mandatory purchase requirement lifted subject to lender approval

  47. Map Changes • Letter of Map Amendment (LOMA) To Correct Errors in Mapping • Adjacent grade higher than BFE

  48. Map Changes • Letter of Map Revision (LOMR) • To revise the map as a result a change • Flood control project • Elevation above the BFE based on fill

More Related