Alabama Survey on Private Flood Market Prompts Legislation To Encourage Insurer Participation

Contact: Jennifer Bowen
(334) 269-3550

12/17/2020

The Alabama Department of Insurance (ALDOI) released results of a survey taken to understand the private flood insurance market in the state. The ALDOI commissioned Milliman, Inc. (Milliman), a premier global consulting and actuarial firm, to survey flood insurance industry stakeholders and understand their concerns and perspectives around writing private flood insurance in Alabama, and ways to overcome regulatory, technical, and consumer-focused challenges.

The survey results have prompted the ALDOI to take action to encourage the private flood market. This includes supporting draft legislation that exempts flood insurance from Alabama’s rating laws, allowing insurers to avoid regulations that may be appropriate for other residential property yet onerous for the unique peril of flood.

“The Milliman survey will go a long way toward helping us identify ways to facilitate a viable private flood market in Alabama that offers coverage at an affordable price and protects Alabamians from expensive flood losses,” explained Insurance Commissioner Jim Ridling. “We want to create an opportunity to encourage insurers to write affordable flood policies that protect our citizens, facilitating a healthy, competitive market for insurance companies.”

As noted in Milliman’s report, Alabama consumers currently have limited choice to purchase flood insurance, especially in the admitted market. In Alabama, as in most other states, the private flood insurance market is relatively undeveloped and does not bridge much of the flood protection gap.

Commissioner Ridling said, “Creating a private flood market will increase options for Alabama homeowners to have a flood policy at a competitive rate. Adding flood coverage will close the gap of insurability and better protect Alabamians from losses.”

Milliman principal Nancy Watkins, a co-author of the report, says, “Through this survey, the ALDOI has demonstrated great leadership in their efforts to reduce the roadblocks to private flood insurance through improvements in regulation, communication and education.”  Download a copy of the survey report by clicking here. 

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