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No. 1 Sales Agent for Flood Insurance: Sandy

Wall Street Journal - 12/14/12 
By AnnaMaria Andriotis

First came superstorm Sandy. Next came a different kind of deluge.

Insurance agents and brokers say calls from homeowners inquiring or applying for flood insurance—which isn't included in standard homeowner's-insurance policies—have picked up since Sandy hit the East Coast in October. Most of the demand is coming from clients in Connecticut, New Jersey and New York.

For luxury homeowners in particular, buying flood insurance is often a two-step process. First is the basic policy, which is largely provided by the federal National Flood Insurance Program and covers up to $250,000 to rebuild a home and up to $100,000 in contents. Since this amount falls short of the coverage needed for upscale properties, a growing number of these owners are looking into so-called excess or supplemental flood coverage.

Rich Aronwald used to have excess flood insurance on his $1.5 million summer home on Long Beach Island, N.J. He stopped paying his $1,200 annual premium in July because the bill kept rising even though he never filed a claim. But after seeing the damage the island incurred, he's asking his insurance agent about a new excess policy to protect his home from future losses. Mr. Aronwald, a 48-year-old financial planner from Bernardsville, N.J., says he wants to be prepared "in case the next storm is twice as bad as Sandy."

Since Sandy made landfall, PURE Insurance, one of a small number of private insurers that offer such policies, has had a roughly 10% to 20% increase, or several dozen more applications, for excess flood insurance from homeowners in the Northeast, says Martin Hartley, chief underwriting officer at the company. New York-based insurance broker Personal Risk Management Solutions, which provides add-on flood policies from other luxury insurers, including Fireman's Fund Insurance Co. and the ACE Group, says about 10% of its clients who previously passed on flood coverage are asking to revisit it. Insurance broker CBS Coverage Group, based in Plainview, N.Y., says it has had at least a 25% increase, or roughly 200 more homeowners signing up for supplemental flood policies.

"We are absolutely without a doubt seeing a consumer who is much more aware of this flood issue [and] we are going to see sales increase," says Spencer Houldin, president of Ericson Insurance Advisors, an independent insurance agency.
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