Don’t Let Rising Flood Insurance Premiums Take a Bite Out of Your Business

At a time when everything seems to be getting more expensive, it will come as no surprise to insurance agents and property owners that – yes – the cost of flood insurance is increasing too. 

In 2022, the National Flood Insurance Program (NFIP) completed its shift to Risk Rating 2.0, which resulted in steeper premiums and little transparency. As the primary source of flood insurance coverage in the U.S., more than 95 percent of flood insurance policies are written through the NFIP. Since the change to Risk Rating 2.0, “existing NFIP flood insurance policies [are] set to see an average rate increase of 51% nationally in the next 10 years,” according to online insurance marketplace Policygenius.

What’s behind this increase? While the NFIP is silent on this topic, we can make an educated assumption that a combination of factors is triggering the rise in premiums, including:

• The rising cost of labor and construction materials
• The increasing frequency and severity of natural disasters
• Overall inflation in the broader economy

When floods strike, individual properties make up a small portion of commodities that need repairs. Now, we’re seeing a growing prevalence of entire communities needing to be rebuilt, including bridges, roads, utilities, and other infrastructure, all of which add to the cost and the scarcity of workers and materials. These escalating threats have placed unprecedented strain on flood insurance programs. 

Fortunately, agents and their insureds may be able to find relief in the more competitive markets.

AFR Services Supports a Wider Network of Insurers

AFR Services has always operated in the best interest of its clients and the team at AFR takes great pride in providing customized solutions to meet both coverage and budget needs. With this in mind, AFR provides broad market access to private flood insurance policies in addition to the NFIP. As premiums have risen, the company has grown its private insurance network by up to 40 percent to help agents better source the best coverage at the most competitive cost. 

With AFR as a trusted resource, agents can relax knowing they won’t lose valuable business at renewal time. When their clients receive steep renewal notices, agents utilizing AFR’s broad market network can easily find alternative options that meet budget requirements. When courting new business, agents utilizing AFR's network can often provide the most competitive quotes with the best coverage options for clients purchasing property in flood-prone areas.

So, regardless of whether an agent has a client with a shocking renewal premium or a client purchasing property in a flood zone, they are set up for success with access to provide the most competitive quote available.

Agents interested in utilizing AFR’s flood insurance solutions should request a quote here.