The time to buy insurance is NOT when the house
is about to float away!
Flood insurance was very expensive and the chances of a flood affecting his property so unlikely that Mr. Summers decided not to purchase it. However, he changed his mind on April 25 when he finally recognized the potential for damage and decided to purchase the coverage.
Unfortunately, his decision was a bit late because a flood event actually began on April 17, and on April 20 directly threatened his property. He probably first noticed the problem when he needed a boat to get from his yard to the nearest road.
Mr. Summers demanded restitution because the National Flood Insurers Association made insurance available on April 23, waiving the standard 15-day waiting period in his area.
The court agreed that the 15-day waiting period had been waived. It also agreed that the insurance carrier was not required to pay for a loss that had already begun at the time that coverage was purchased. However, Mr. Summers did get his money back.
Are you familiar with the National Flood Insurance Program?
The National Flood Insurance Program (NFIP) is a federal flood insurance program sold through independent agents. Insurance companies handle claims on behalf of the federal government. The policies are standard and there are a number of very specific requirements.
In the claim described above, the insurance agent was added to the claim because of advice he gave the insured. He was dismissed due to a technicality but could have been found liable. Do you and your employees know how the NFIP works?
Let your customers know how important flood insurance is!
Customers who sustain flood losses are likely to search everywhere to find coverage. The best place is their flood insurance policy from the NFIP. If they don't have one, another place they may look is your errors and omissions coverage.
When a loss that is not covered occurs, the client often forgets that you discussed and recommended purchasing the coverage. The client's usual argument is that the coverage would have been purchased if only its importance had been stressed. The Client/Agent Coverage Agreement is one method you can use to document your recommendations and whether or not your client accepted them.
Coverages Applicable has been updated. Some of the highlights included are:
New agribusiness category
30 new classifications added
NAICS/SIC Index updated
All coverage descriptions revised
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