Personal Insurance Blog

Who Insures Flood Policies?

You may have a flood insurance policy issued by a national insurance carrier such as Hartford, Mapfre, Nationwide or Travelers. The insurance company’s name, address and logo appear on the flood policy coverage page. However, the private insurer company is only issuing and servicing the standard flood policy on behalf of the federal government. In the coming years, we expect there will  be many discussions of privatization of flood insurance given the flood programs $18 billion deficit. At this time, all flood policies with up to $250,000 in building coverage are underwritten by the federal government. Amounts over $250,000 are considered excess flood policies and these policies are insured by private insurers instead of the federal government.

Prepare for flood or storm with personal insurance from andrew g gordon inc

Insurance companies began participating in the Write Your Own (WYO) Program in 1983 as a cooperative undertaking between the insurance industry and FEMA. The WYO Program allows participating property and casualty insurance companies to write and service the Standard Flood Insurance Policy in their own names. The companies receive an expense allowance for policies written and claims processed while the Federal Government retains responsibility for underwriting losses. The WYO Program operates as part of the NFIP, and is subject to its rules and regulations. There are currently 85 insurance companies participating in the write your own program.

The primary goals of the WYO program are:

  • Increase the NFIP policy base and the geographic distribution of policies;
  • Improve service to NFIP policyholders through the infusion of insurance industry knowledge;
  • Provide the insurance industry with direct operating experience with flood insurance.

Recently, Travelers Insurance announced that they are discontinuing their participation in the Write Your Own program. Travelers sold its flood policy renewal rights to American Bankers Insurance Company of Florida, part of Assurant Inc. Customers with Travelers Flood policies will be renewed with American Bankers Insurance Company of Florida (ABIC) for policies renewing October 15 and later. In some cases, agents will move these Travelers Flood policies to other Write Your Own carriers. Travelers stepped out of the flood program because it was a small, non-core part of their business. Exiting the program eliminated operational complexities associated with maintaining separate underwriting and claims processes required for participation. If you have a flood policy serviced by Travelers through our agency, you can expect to see a change in servicing carrier at your next renewal.

If you have any questions about how these changes could affect you personally, give us a call at Gordon Insurance (781) 659-2262, and we would be happy to help you in any way we can! Learn more about flood insurance here.


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