Chubb has just issued a Press Release announcing that in addition to its Primary Flood Insurance offering, "Chubb Introduces Broad Excess Flood Policy ...." Link to the Chubb December 20, 2006 Press Release here.
A valuable gift is given us at this time of the rolling year, by taking a closer look at where Chubb is going. A concise and valuable education is available in Coverage issues for Catastrophe Claims and what to offer to address and relieve them, as perceived by one of the world's leading Insurance Companies. Chubb currently offers Primary Flood Insurance in 20 States in the United States. Chubb's Primary offering is both broader in potential Coverage than the mainstay Federal Flood Insurance Policy provisions, and it offers much higher Policy Limits: $15,000,000.00 in Home and Contents Coverage, attractive to high-tax-bracket Policyholders.
The new Excess Flood Insurance Policy offered by Chubb will be made available in 15 of the 20 States in which the Primary Flood Policy is offered. In the future, more States will receive the Excess offering, according to the linked Press Release.
Imagine a map of the United States with me for a moment. 10 of the 20 States where Chubb offers it Primary Flood Insurance are located inland. These are places where rivers and lakes are likely to be the primary sources of flooding, such as Illinois, Missouri, and Pennsylvania. 8 States in this group are located on the Atlantic Coast. Florida is the only State located on the Gulf Coast, and Florida is the only State on the list which is located on the Atlantic Coast south of Virginia. Finally, 2 States on the Pacific Coast are on Chubb's Primary offering list. 15 of these 20 States make the cut for Chubb's Excess Flood offering: Currently, Arizona, Colorado, Idaho, Ohio and Utah do not.
Anyone would ask why, with several Insurance Companies refusing to tread where many different kinds of Claim risks are associated with Hurricanes and other Catastrophes -- such as from Wind -- why is Chubb, an admittedly bright group of people, offering any sort of new Coverage that would be available only in the event of a Catastrophe?
One reason appears in a newspaper report apparently based at least in part on Chubb's linked Press Release, above. The newspaper report contains a quote that is not found in the Press Release, along with other additional and useful information. Stated on Web Site as Available ONLY TO WALL STREET JOURNAL ONLINE SUBSCRIBERS: Lavonne Kuykendall, "Chubb to Offer Flood Insurance for Some Upscale Coastal Customers" (Wall Street Journal, Thursday, December 21, 2006, p. D2, col. 1). In the newspaper report, Chubb's spokesperson who was responsible for rolling out this new Flood Insurance product is quoted as stating that some other Insurance Carriers are adjusting their offerings because those other Insurance Carriers are relying on "'new catastrophe models'" which suggest that "'they are more exposed than they thought they were.'" In other words, Chubb is basing its projections and thus its new Flood Insurance offerings on the reliable fact-based Computer Model for Hurricanes and other Catastrophes.
The clear and obvious result of some, but by no means all other Insurance Companies, buying in to a new 'model' based instead on opinions about past and future claims is that those other Insurance Companies are adjusting their own offerings down.
Hoping for protection to All which addresses Catastrophes in the United States and the World, Happy Holidays to All!
REMINDER: THE CONTENTS OF THIS BLOG DO NOT MAKE AN ATTORNEY-CLIENT RELATIONSHIP. ALWAYS CONSULT THE CASES AND LAWS OF EACH PARTICULAR JURISDICTION AND AN ATTORNEY FAMILIAR WITH THE PARTICULAR INSURANCE ISSUE IN THAT JURISDICTION, WHENEVER YOU TRY TO ADDRESS OR RESOLVE ANY LEGAL QUESTION.
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