Over 90% of homes in New Jersey and New York could see cheaper premiums with private flood insurance, according to Milliman
The report includes additional context for the findings in light of the changing rating structure of the National Flood Insurance Program (NFIP). The study also explores the potential ramifications of "cherry-picking" – the concern that private insurers might target only attractive risks, leaving the NFIP underfunded.
Key findings from the study include:
- Across each state, approximately 94% of homes in
New Jersey and 96% inNew York could see cheaper premiums with private insurance than with the current NFIP structure. - In
New Jersey's high-risk zones (NFIP's Special Flood Hazard Areas), 85% of homes could see premium rates cheaper than the NFIP, while inNew York , 72% of homes could see premium reductions. - Over 360,000 homes could be newly insured for flood if just 10% of homeowners outside high-risk zones purchased cheaper policies in a private market.
- Of the vast majority of homes located outside high-risk zones, approximately 94% (
New Jersey ) and 95% (New York ) could see private insurance premiums as low as$250 annually.
"Hurricanes Harvey and Irma just last year, and Sandy before them, demonstrated the devastating financial effects flood can have on those who are not sufficiently insured," says
"As demonstrated in this study, an established private flood market brings with it many benefits, including the opportunity to close the insurance protection gap in
The study reflects the market of single-family homes in those states, not only those who are currently purchasing flood insurance from the NFIP, and the modeled NFIP premiums do not include the effects of grandfathering. The estimated private insurance premiums were developed using RMS catastrophe model results and reasonable assumptions selected by Milliman. To view the complete report including additional findings and critical assumptions, visit www.milliman.com/NJNYfloodinsurance.
About Milliman
Milliman is among the world's largest providers of actuarial and related products and services. The firm has consulting practices in healthcare, property & casualty insurance, life insurance and financial services, and employee benefits. Founded in 1947, Milliman is an independent firm with offices in major cities around the globe. For further information, visit milliman.com.
About RMS
RMS solutions help insurers, financial markets, corporations, and public agencies evaluate and manage catastrophe risks throughout the world. RMS has over 1,200 employees across 13 offices in the US,
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