I think it might make more sense for the companies to come up with an endorsement for small amounts of coverage available to everyone to add to their Homeowners for a low price. This could work sort of like the ID fraud optional endorsements. If people could buy a little flood coverage say $15,000 for $25 a year they may just add it. That would give the companies the money and spread out the risk. They can include Earthquake too. Just an idea.
I suspect the result would be adverse selection. If optional, only those who think they might need it will buy it. You wind up over-concentrated in the highest risk areas.
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I think it might make more sense for the companies to come up with an endorsement for small amounts of coverage available to everyone to add to their Homeowners for a low price. This could work sort of like the ID fraud optional endorsements. If people could buy a little flood coverage say $15,000 for $25 a year they may just add it. That would give the companies the money and spread out the risk. They can include Earthquake too. Just an idea.
I suspect the result would be adverse selection. If optional, only those who think they might need it will buy it. You wind up over-concentrated in the highest risk areas.
I think it would be a good idea….
If a hurricane hit the NY area that would be a $100 billion storm. Of course NY needs a CAT fund. Think twice country boys before you say no.