Flood insurance for homeowners in Florida

As hurricanes Harvey, Irma and Michael underlined once again, many homeowners in Florida are exposed to the risk of flooding. Until recently, however, adding flood insurance to an existing homeowners insurance policy was rarely an option. Because flooding risk is sensitive to each specific location, it has been difficult to price accurately. In a joint venture with Security First Insurance (www.securityfirstflorida.com), we helped develop a flood insurance solution that overcomes this challenge.

The key to this innovative solution is that it uses Swiss Re’s proprietary flood model. Based on the unique characteristics of a specific exposure such as location of the structure, type of construction and insured value, our model generates a premium that more accurately reflects the actual risk. Furthermore, the solution combines flood and wind risk in one policy with one deductible, meaning there is no longer a need to distinguish whether a loss has been caused partially by flood or partially by wind.

The customers of Security First can now choose to add the new, optional flood and water backup coverage to their existing homeowners policies. The fact that they can get comprehensive flood insurance protection at reasonable prices through one policy shows that flood risk is insurable in the private market. Beyond sharing the information of our flood model, we support the solution with claims, regulatory, marketing and underwriting expertise, all backed by reinsurance capacity.