Property and casualty insurance holding company, Kingstone Company, Inc., has received necessary approval for its innovative voluntary flood solution for National Flood Insurance Program (NFIP) X-Zone residents in New York State, the company has announced.
It’s believed that this is the first voluntary flood solution in New York State, and enables NFIP X-Zone residents that secure homeowners coverage via Kingstone to buy flood coverage up to $50,000.
Huge debt and high premiums are just some of the problems facing the NFIP in the U.S., and in recent times government and insurance industry officials and executives have called for the development of a private flood insurance market, in an attempt to make flood protection more widely available and affordable and to alleviate the burden from taxpayers.
The new product from Kingstone appears to have done just that, bringing more U.S. flood risk to the private insurance market, which, ultimately results in more demand for reinsurance coverage.
Ben Walden, Kingstone Chief Actuary and Executive Vice President, said; “We worked closely with Aon, our long time reinsurance intermediary, to secure the appropriate reinsurance. In conjunction with our modeling partners and our software vendor, we developed an innovative proprietary product, the first of our suite of flood products which will be rolled out over the next six to nine months.”
Walden continued; “We’ve worked hard since mid-2016 to bring this much needed product to market. In short, it will allow those that live in a National Flood Insurance Program (“NFIP”) X-Zone who are securing Homeowners coverage through Kingstone to purchase flood coverage. With it, those who qualify can secure up to $50,000 in coverage and turn a flooding event into a covered cause of loss.”
Even for a developed country such as the U.S. flooding results in very high economic losses year-after-year, driven in part by a lack of insurance penetration as premiums are just too high for customers, and the failings of the NFIP.
FEMA recently called for the expansion of flood insurance across the states via private markets and the NFIP, and is also keen to expand on its “cornerstone” flood reinsurance placement in an effort to better protect the NFIP, while transferring more of its risk to the private sector.