Posted On: November 15, 2005, 6:29 pm CST

Posted By: Rate Maker

1st off AIR does not model flood losses so modeling a cat 2 vs. a cat 3 for purposes of breaks in the dikes is a waste of time.
2nd, the standarad ISO homeowners policy DOES NOT cover flood but there are many, including agents, who want the flood damage covered from the HO policy which specifically excludes flood b/c they do not have a waiver from the insured which now presents them an e&o situation. But if the companies pay for the damage the lazy agents are off the hook.
3rd, the politicians believe the homeowners policy should pay for these poor people who did not buy flood protection (sorry, a contract is a contract).
4th and final, the models are only estimates and any company who relies soley on aggregations based off of a model is in big trouble. Strong underwriting for accurate replacement values upfront only increases the accuracy of any model. Junk in = junk out!
Even MSB has published reports that the majority of homes across America are underinsured by as much as 25%!