Programs, coverage, and technology for flood insurance

Answering the question “what does flood insurance cover?” is more nuanced than you might imagine. There are several variables, including who you’re asking, what you’re covering, and more. Here are answers to some of the top-of-mind questions agents and business owners may have about flood insurance.

1. Hurricane season starts June 1. So now is the time for agents, and businesses, to start thinking about flood coverage. What does flood insurance cover when working with Neptune as compared to the National Flood Insurance Program (NFIP)?

Here are a few key differences outlined to answer the key question, “what does flood insurance cover?” at Neptune vs. the NFIP: 

       A. The NFIP has a maximum limit of $500K on a commercial building. Neptune offers up to $4M for commercial non-             residential, $10M for commercial residential (5+ unit apartments) and $15M for condo associations. Further, we have              higher contents/personal property limits (up to $1M).

        B. The NFIP is a program that offers basic coverage (excluding business interruption insurance), settles a commercial claim              at actual cash value (ACV), and does not offer contents coverage in the basement. Neptune offers a variety of optional              coverages that could include business interruption insurance and/or loss of rental income, replacement costs on              buildings, and basement contents, to name a few.

         C. The NFIP program has a 30-day waiting period. Neptune has a 10-day waiting period, with the ability to waive that wait               for a loan closing or for rolling over a flood policy from another provider. Here are a few additional facts about Neptune               that you may not know: We are the largest private flood insurance provider in the country with over 230,000 clients. We               offer a self-service portal that allows agents to quote and bind flood insurance in under 2 minutes. 

2. What is some advice you could give business owners about making sure they have the right flood insurance to protect their investments?

At the end of the day, a building is a building. A flood doesn’t discern between a residential or a commercial property; just as a flood doesn’t see flood lines drawn on a map. You should always consider, investigate, and ask some key questions about your risk of flood and what flood insurance covers, for example: 

• If a catastrophic flood affected your property, what would that mean for you and your business? 
• Could you afford a complete rebuild out of pocket? 
• How long could your business survive if your building is non-operational for three months? 
• Is $500K settled at actual cash value enough coverage for your building?

Further, let’s consider some facts. The NFIP has a maximum commercial limit of $500K. While commercial real estate values have increased—to say the least—over the past decades, this limit has remained unchanged. Natural disasters continue to become more unpredictable, more destructive, and more frequent, affecting areas that were once considered “natural disaster free.”

Whether you own the building or are tenants, it is always wise to consider the potential risks of a flood. It does not matter if you are in flood zone A or X; floods occur in all zones. It doesn’t matter if your property is coastal, inland, or in the mountains; where it rains, it floods. Most importantly, your risk of suffering a damaging and costly flood event exists whether your lender requires flood insurance or not.

Lastly, if you are purchasing a property and flood insurance is affordable, purchase a policy for one year, if only to put your mind at ease and “test the waters.” As major rain/storm events occur, take note of where the water lies and make an educated decision on whether you should renew or not.

3. Technology is driving a lot of rapid change in the insurance industry. Can you give us an overview of what Triton technology is? In other words, how does your team leverage artificial intelligence and machine learning to determine what flood insurance covers for each individual business/owner and provide insurance coverage that truly benefits the insured?

Ultimately, Neptune is an artificial intelligence/machine learning (AI/ML) company. We use technology in all corners of the business to serve our agents and our clients. Triton allows Neptune to select and price risk appropriately and immediately—as we have no human underwriters—while ensuring we are growing at a responsible rate.

Consider two benefits of our technology for agents and clients:

1. )Triton allows agents to quote and bind a flood policy in under two minutes with 98% property availability. Most importantly, we price the policy appropriately relative to the risk and what the flood insurance covers. This has allowed us to offer rates that are more affordable than the NFIP rates (on an apples-to-apples comparison), while maintaining a healthy book of business.  

2. ) Neptune uses Triton to disaggregate our risk. This means we spread our risk across our five carrier programs, as in… we “don’t put all your eggs in one basket.” As a Neptune client or partner, this means that whenever a major storm event affects a specific area, Neptune will survive and continue to support your current and future clients.

BONUS QUESTION: We also know that you love travel and adventure. What’s your favorite region or country to visit? What destination exceeded your expectations?

Out of the country, I have spent the most time in the Caribbean, as I love to scuba dive. Island time is always a great way to relax for some much-needed R&R. I have traveled to Europe a few times, with my most adventurous activity being paragliding in Interlaken, Switzerland. I will always remember Lisbon, Portugal for exceeding my expectations. High on my list to visit includes New Zealand and Japan to really experience the other side of the world.

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