Flood Insurance

Aon Provides Flood Guidance

Aon produced an agents’ guide covering newly-effective changes to the National Flood Insurance Program
By: | November 1, 2017 • 4 min read

As people in Florida, Puerto Rico and other areas struggle to recover from devastating hurricanes and storms, new regulations from the Federal Emergency Management Agency (FEMA) regarding flood water coverage took effect October 1. Knowing, interpreting and communicating those changes is essential for insurance agents as they write policies that could prove to be lifelines for customers.


With that in mind, Aon National Flood Services compiled an eBook to help agents better understand the changes to FEMA policy, agents’ responsibilities and how the changes will affect consumers.

“Our goal is to make a difference in people’s lives by helping them protect what is important,” said Cynthia DiVincenti, Vice President at Aon National Flood Services.

“Providing eBooks on various topics, including the NFIP changes, allows us to help educate insurance professionals so that they can best serve their clients. This booklet is geared toward insurance agents, so they have the tools they need to work with their clients.”

FEMA’s Insurance Role

A federal agency, FEMA’s mission is to support citizens and first responders in their efforts to build, sustain, protect and prepare for catastrophic events, such as floods, and provide support when those events do occur. The agency develops extensive maps of floodplains and assigns levels of risk to properties based on their proximity to floodplains. The risk level is a determining factor in insurance rates.

Cynthia DiVincenti, Vice President, Aon National Flood Services

According to FEMA’s website, NFIP works to “reduce the impact of flooding on private and public structures by providing affordable insurance to property owners and by encouraging communities to adopt and enforce floodplain management regulations.”

These efforts help mitigate the effects of flooding. Overall, the program reduces the impact of disasters by promoting the purchase and retention of general risk insurance and specifically flood insurance.

Importantly, FEMA sells insurance for property owners and renters through its National Flood Insurance Program (NFIP). This service is crucial for those whose standard policies do not include specific flood insurance.

Write Your Own Program

FEMA participates also in the Write Your Own (WYO) Program, a collaboration between the private insurance industry and FEMA which allows property and insurance companies to write and service the Standard Flood Insurance Policy. Insurers receive an expense allowance for policies written and claims processed but the federal government underwrites losses.

Homeowners, business owners and renters at properties located in an NFIP-participating community, can purchase policies. Agents should be prepared to determine if a customer’s property is within a NFIP- participating community and can use the Community Status Book or Community Flood Map as a reference.

Still, many property owners, and some renters who also qualify for NFIP, don’t have flood insurance. For example, FEMA notes that more than 800,000 property owners in at-risk locations in Florida alone are without flood insurance, making booklets such as Aon’s product a beneficial tool for industry professionals working with clients to better protect their homes and other possessions.

The Changes

Regulations and changes sometimes can be cumbersome to interpret. Aon tries to educate its agents with its timely and easy-to-read publications.

One change that agents will enjoy conveying to their customers is reduction in the cost of the federal policy fee for renters’ insurance to $25. This is a 50 percent reduction, making it now more affordable.

“Staying in the information loop is an ongoing and vital task for all agents.” – Cynthia DiVincenti, Vice President, Aon National Flood Services

This change applies to renters that renew or purchase flood insurance on or after October 1, 2017. Insurers will receive by mail and must update the “Tenant Indicator” on contents-only policies within 15 days of receipt. If the letter is not returned on time, the fee defaults to the previous $50 fee.


“In order to validate those policyholders eligible for the reduced fee, agents with contents-only policies are required to provide information to indicate if the policyholder was a tenant,” said DiVincenti.

Another change: surcharges will be pro-rated instead of fully earned on policies that are cancelled for specific reasons such as building sale, content removal, the insurer no longer requires it or in the event of a mortgage payoff.

“Staying in the information loop is an ongoing and vital task for all agents. FEMA publicizes changes to regulations six months prior to the effective date and much of the information is available on their website.

“As a trusted advisor, insurance agents need to be current on the various types of insurance products they sell and service. The information within the eBook provides agents with the latest changes to the NFIP,” said DiVincenti.

For more information visit www.FloodSmart.gov.

To read the Aon eBook go to http://october2017.nfipchanges.com/. &

Mercedes Ott is managing editor of Risk & Insurance. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

2018 Risk All Stars

Stop Mitigating Risk. Start Conquering It Like These 2018 Risk All Stars

The concept of risk mastery and ownership, as displayed by the 2018 Risk All Stars, includes not simply seeking to control outcomes but taking full responsibility for them.
By: | September 14, 2018 • 3 min read

People talk a lot about how risk managers can get a seat at the table. The discussion implies that the risk manager is an outsider, striving to get the ear or the attention of an insider, the CEO or CFO.


But there are risk managers who go about things in a different way. And the 2018 Risk All Stars are prime examples of that.

These risk managers put in gear their passion, creativity and perseverance to become masters of a situation, pushing aside any notion that they are anything other than key players.

Goodyear’s Craig Melnick had only been with the global tire maker a few months when Hurricane Harvey dumped a record amount of rainfall on Houston.

Brilliant communication between Melnick and his new teammates gave him timely and valuable updates on the condition of manufacturing locations. Melnick remained in Akron, mastering the situation by moving inventory out of the storm’s path and making sure remediation crews were lined up ahead of time to give Goodyear its best leg up once the storm passed and the flood waters receded.

Goodyear’s resiliency in the face of the storm gave it credibility when it went to the insurance markets later that year for renewals. And here is where we hear a key phrase, produced by Kevin Garvey, one of Goodyear’s brokers at Aon.

“The markets always appreciate a risk manager who demonstrates ownership,” Garvey said, in what may be something of an understatement.

These risk managers put in gear their passion, creativity and perseverance to become masters of a situation, pushing aside any notion that they are anything other than key players.

Dianne Howard, a 2018 Risk All Star and the director of benefits and risk management for the Palm Beach County School District, achieved ownership of $50 million in property storm exposures for the district.

With FEMA saying it wouldn’t pay again for district storm losses it had already paid for, Howard went to the London markets and was successful in getting coverage. She also hammered out a deal in London that would partially reimburse the district if it suffered a mass shooting and needed to demolish a building, like what happened at Sandy Hook in Connecticut.

2018 Risk All Star Jim Cunningham was well-versed enough to know what traditional risk management theories would say when hospitality workers were suffering too many kitchen cuts. “Put a cut-prevention plan in place,” is the traditional wisdom.

But Cunningham, the vice president of risk management for the gaming company Pinnacle Entertainment, wasn’t satisfied with what looked to him like a Band-Aid approach.


Instead, he used predictive analytics, depending on his own team to assemble company-specific data, to determine which safety measures should be used company wide. The result? Claims frequency at the company dropped 60 percent in the first year of his program.

Alumine Bellone, a 2018 Risk All Star and the vice president of risk management for Ardent Health Services, faced an overwhelming task: Create a uniform risk management program when her hospital group grew from 14 hospitals in three states to 31 hospitals in seven.

Bellone owned the situation by visiting each facility right before the acquisition and again right after, to make sure each caregiving population was ready to integrate into a standardized risk management system.

After consolidating insurance policies, Bellone achieved $893,000 in synergies.

In each of these cases, and in more on the following pages, we see examples of risk managers who weren’t just knocking on the door; they were owning the room. &


Risk All Stars stand out from their peers by overcoming challenges through exceptional problem solving, creativity, clarity of vision and passion.

See the complete list of 2018 Risk All Stars.

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]