This year I was privileged to attend the 2019 National Flood Conference in Washington D.C. The National Flood Conference is a three-day annual event for flood insurance industry professionals, and various other professionals whose industries overlap with flood insurance (think mortgage lenders, insurance agents, mold remediators, attorneys, etc.). Over the course of the next few days I will provide day-by-day recaps of my experience at the National Flood Conference with my thoughts, opinions, and interesting things I've learned.
As a preliminary matter, I want to relay that is a lot of nice people at this conference – friendly people, experienced people, and professional people. My gripe, as a policyholders' advocate and attorney, is this conference – the National Flood Insurance Conference – is a business conference with little focus on people whose lives were affected and flooded by flood damage. Moving forward for future years, I think it would be beneficial if the National Flood Conference includes at least one panel with speakers who represent aggressive policyholders and flood victims.
NFC for National Flood Conference
Without further ado, here's my Day 1 recap:
Day 1 – There are a lot of people here! Must be nearly 1,000 various flood insurance professionals and the likes. The Welcome session started with a bang, with a large ballroom filled and over-flowing with people. There are a lot of event "sponsors" here, including the adjusting companies, engineer firms, law firms, and others who are considered "industry partners" (term commonly used throughout the conference).
Beyond welcoming remarks there was a discussion on "Antitrust Compliance Reminders" emphasizing the importance of not video-recording the panels and discussions, among various other rules.
Next up was "Building Foundations for a New NFIP" where David Maurstad ( who is FEMA's Deputy Administrator for Insurance and Mitigation. There is a lot of hype being generated for something called "Risk Rating 2.0," which seems to be a new modernized FEMA / NFIP initiative that incorporates purely cutting-edge technology to rate insurance risks ( ie properties)
9:00 am at a very interesting presentation called "Surviving the Next Storm – The Sand Palace" by Dr. LeBron Lackey, whose home is made famous by one of the only fully-standing properties on Mexico Beach Florida after Hurricane's destruction. Dr. Lackey, who is a radiologist by trade, discussed how he set out to build a home that exceeded code requirements to sustain the tests of weather and time. Dr. Lackey's home was built above and beyond the building codes and regulations in his area – the local code required pilings 30 feet into the ground, but Dr. Lackey incorporated pilings 40 feet into the ground. Dr. Lackey emphasized that areas frequently hit with certain types of natural disasters must increase their building and code requirements to force people to build structures that will survive the storm. This issue hits close to home for this is such a huge issue where I live in Houston, Texas where regulation of low building code / permit standards have led to severely increased flooding throughout the streets of Houston with now for water to run -off, crumbling leaking homes made of low-quality stucco, and more.
The first roundtable panel was titled "NFIP Reform and Reauthorization? Where Do We Go From Here? ”This panel included an executive from JP Morgan (a lender), a realtor, and an insurance company executive, and a state floodplain manager. Each panel member offered their unique perspective and insight on current issues with flood insurance, ideas for reform, and otherwise.
A common issue mentioned by several of these panel members, which I similarly find of importance, is the need for more diverse types and amounts of flood insurance coverage. There was a discussion about how the current NFIP / WYO flood insurance policies only offer policy limits of $ 250k for homes and $ 500k / building for commercial properties, which is frequently not covered sufficiently to cover those eligible properties.
There was a debate among panel members as to whether the NFIP needs reform or now Congress should carte blanche reauthorize the NFIP for another 10 years without making any changes or reforms to the program. Many panel members agreed that a simple resolution is that included as a covered peril under normal homeowners or commercial property coverage, the same as fire, hail, etc.
In my opinion, that seems like a very practical resolution that resolves many of the issues with the NFIP and its quest for reauthorization.
Another notion that many seemed to be on board with is a push towards enabling policyholder to mitigate through reform and steps such as increasing the increased cost of compliance amount from $ 30 k to $ 60k, and apply it on top of the limits otherwise, rather than as part of the limits otherwise in the same pool.
The next session called "The US Private Flood Insurance Market" told us what we largely Already known – private flood insurance is almost always better than NFIP. The private flood insurance market is better at reaching consumers and having stronger resources to devote to marketing and spreading the word about the necessity of coverage. Further, the private flood market offers significantly more expansive and comprehensive flood insurance coverage tailored to each policyholder and consumer's particular needs.
The private market flood insurance panelists are a huge opportunity for growth of the private sector or flood insurance, one just quoting a prominent financial analyst stating that the private flood market is the largest opportunity in the US with 17% increases / gains from year to year, and current occupancy of only 4% of the market share compared to NFIP / WYO policies. ] Ultimately, the message was clear and consistent – the NFIP policy is not adequate at providing sufficient coverage.
I believe that much of the anticipated or sought reforms (as mentioned in the earlier seminar ) are resolved and addressed through private flood insurance, which is regulated under state law rather than federal law.
During the afternoon part of Da y 1, there were several workshops / seminars running concurrently, and this recap was solely based on those that I attended.
I chose to spend my time primarily on those courses that are focused on Claims Handling and Legal Matters, which are directly relevant to me, but there were additional seminars on regulatory issues, ratings, NFIP history, and lenders issues that ran concurrently and I could not attend – I have not yet figured out how to be in two places at once.
a Solid NFIP Claims Foundation: One Customer at a Time ”was a big disappointment and in my opinion, truly a missed opportunity. The panelists were FEMA / FIMA personnel, and insurance professionals. Next year I think this course would be more beneficial by including policyholder attorneys who regularly represent flood insurance policyholders.
My final take on this class was that it was intended for insurance adjusters and others who work directly with policyholders (rather than agents , underwriters, lenders, etc.). There were some good messages relayed, including the importance of communication with the policyholders from the outset and knowing the resources and outlets to people to; the importance of being proactive on a claim and knowledgeable on the FEMA Bulletins and Memorandum.
However, something that rubbed the wrong way is that FEMA professionals were seemingly making a mockery of all the information that policyholders are supposed to know , and the steps they are supposed to take when dealing with a flood claim / loss. Steps required per the policy including:
- "Separating the damaged and undamaged property, putting it in the best possible order so that we may examine it;"
- "Prepare an inventory of damaged property showing the quantity, description, actual cash value, and amount of loss. Attach all bills, receipts, and related documents. ”
Among others. Throughout all of this, I can't help but think that they have lost sight of the average American property owner who has just faced the most devastating event of their life. They reiterated how almost no policyholders actually know these things, much less than them, and in my opinion, rather than talking about what the policy should know but does not have, they should have focused on discussing ideas to better educate the policyholders.
The last part of that seminar was devoted to FEMA bragging on itself about being "proactive" by partnering with WYOs and their agents on "a year-round marketing campaign" to get more people signed up with flood insurance. Seems to be pushing the cart before the horse in my opinion, and further, striking me as highly odd because FEMA is supposed to be the government and unable to make a profit – talk about choosing the bottom line about peoples 'lives. Nonetheless, the message was clear that FEMA, the WYO insurance companies, and the adjusters are partners in this, theyre all in it together.
The last discussion of Day 1 that I attended was the "NFIP Legal Issues Panel, which includes FEMA's General Counsel, Jordan Fried, as well as two WYO / NFIP insurance defense attorneys. FEMA Counsel Mr. Fried spoke first, and the majority of his discussion on the panel of judges and attorneys that was part of, along with Merlin Law Group attorney Rene Sigman, to develop Joint Initial Discovery Protocols and Procedures to be used to effectuate early resolution in litigation of flood insurance and other property insurance and disaster cases. Mr. Fried discussed how these protocols were debated and worked on by a group of attorneys, and he is very excited about them. FEMA fully endorses the use of these protocols in NFIP litigation.
The next part of the legal discussion was an update on the NFIP case law that has come out across the country over the past year. There were somewhere between 10-15 cases discussed, and ultimately there was nothing too monumental or noteworthy as far as changes or surprising opinions.
Most of the case law cases were cases where the policyholder / plaintiff was pro (representing themselves, or at least trying to), and in almost every circumstance the case was dismissed because the policyholders did not comply with the law in one of many ways.
The important lesson to relay / learn there is that it is almost never a good idea to represent yourself, even if you are an attorney. When in litigation, having an attorney who is both knowledgeable and experienced in flood insurance law – as many of us are at Merlin Law Group – is always recommended to help guide and advise policyholders of their rights.
After the legal seminar there was a meet & greet happy hour where I with and spoke for some time with Russ Tinsley who is with FEMA's NFIP Appeals Department. Russ has been with FEMA for well over 10 years and has been in the insurance industry for much longer than that. It was a pleasure for me to get to speak with him – we discussed different steps that we can take to bridge the gap and get these claims resolved better and faster for flood victims.