Delaware business Insurance Update from CNC Insurance Associates, "A Call For Privatizing Flood Insurance" 9-14-15

Since its inception, the Federal Flood Insurance program has struggled with debt. This government backed program is currently 24 million dollars in the hole. The reason is that the Federal program has not charged the proper premiums for the risks that are in flood zones. Big payouts have ensued from storms over the years, and the debt has grown. So many in the industry are calling for private money to take over the program. There is plenty of capital in the insurance  marketplace and also new technology to help charge the proper premiums for the exposure., so now may be the time. Unfortunately the Federal Government does not have the political will to make that happen. The main reason is most policies are under priced and to make the corrections many voter's premiums would skyrocket.  In 2012 the Biggert- Waters bill did just that only to have it recalled because of the public outcry when they got their renewal bills. Sooner or later something has to be done. If the debt hole continues to grow, a few major storms in flood prone areas would cause the Federal Government's program to become unsustainable. Keep your eye on this folks as changes will have to occur. Until next time be careful out there and know your risks.

G. Kevin Nemith President CNC Insurance Assoc. & The Small Business Insurance Center
Serving DE, MD, VA, NJ, & PA
www.cncinsurance.com
www.bizinsurancetv.org


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