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Tiny Coastal American Insurance Co. embarked on a novel way to deliver company-underwritten flood insurance at a time when the financially struggling National Flood Insurance Program is still underwriting most flood insurance.
In an interview on the 11th anniversary of Hurricane Katrina, Aug. 29, and a follow-up a few weeks later, Coastal American co-founder and President Ned Dolese described a business plan he thinks makes sense for the risk it covers, a plan he hopes the Mississippi company can expand to other states.
Flood insurance, if it is not supplied or underwritten by the NFIP as part of the Federal Emergency Management Agency, is sold through surplus lines. But Coastal American is offering flood insurance as an endorsement to a standard homeowners policy, and is offering it outside of the government's mapped flood zone.
"To my knowledge, this is the first use of a flood endorsement to be written in America on admitted paper," Dolese said. The company wrote its first flood endorsement attached to a homeowners policy Aug. 2 in Mississippi. Admitted paper refers to the insurance carrier's approval from the state insurance department to write insurance in that state, with...