FEMA/NFIP is actively encouraging agents to use policy stickers (issued by FEMA/NFIP) on all of their property insurance policies and/or billing notices, advising their insureds that the policy to which it is affixed does not have coverage for flood damage.
These federal stickers make statements about the specific coverage contained in an insurer’s policy, and that insureds may understand “flood” in a far more limited way than what the insurer means by the actual water damage exclusion clause contained in the policy.
What It Means to Agents: PIA members should avoid being inadvertently caught in the middle. Before using these stickers, there are several considerations. The top three are:
- Advise in writing each of your insurers that you are responding to the request made by FEMA/NFIP for agents to use the stickers, provide a copy of the sticker, and outline the specific contexts of your use, i.e. on the following property policies of yours and/or a copy of the explanatory text that accompanies it or is used in a consumer communication.
- Advise these insurers that you will take this action as their agent (and in conformity with the agency agreement) as of XX date, unless they advise you otherwise.
- The stickers make consumers aware that only the federal government through the FEMA/NFIP program provides insurance for flood damage. So, PIA members need to secure a quality NFIP WYO insurer partner, like PIA-Hartford WYO offering, or decide how they will refer insureds to a source for such coverage.
March 21, 2006