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Will Florida's new flood insurance offering be a game changer?

The unfortunate reality for hundreds of thousands of Floridians who reside in those areas designated as high-risk flood zones is that their flood insurance premiums are increasing by as much as 18 percent per year.

Indeed, homeowners face these steep premiums regardless of whether they secure their coverage directly from the National Flood Insurance Program or via a private company whose policies are backed by the NIFP.

Interestingly enough, Homeowners Choice Property and Casualty, the first private insurer to answers state lawmaker's entreaties for primary flood insurance back in 2013 recently announced that it has formed the first-of-its-kind standalone insurance company selling only flood insurance and which is both licensed and overseen by the state Office of Insurance Regulation.

What exactly is this standalone insurance company?

HCI Group Inc.'s new flood insurance-only company is called TypTap and was launched after company officials realized that they were missing out on a huge market segment by only selling flood insurance to its own property insurance holders.

Is it open for business?

Yes, the TypTap website officially went online March 1.

What's significant about this cutting-edge website, say company officials, is that it can provide interested property owners with flood insurance quotes within a few seconds and actual coverage within a few minutes -- all without ever speaking to an agent.

It's able to do this because prior to its launch, the company gathered and preloaded data on eligible policyholders across the state, such that all people really need to do is enter their address and how much coverage they would like.

Do the flood policies issued by TypTap provide customers with more?  

It would appear so. Consider that while the NFIP coverage is limited to $250,000 for buildings and $100,000 for contents, and requires an elevation certificate, TypTap's coverage is limited to $500,000 for buildings and $250,000 for contents, and requires no elevation certificate given that it's already in possession of this data.   

Just how expensive are TypTap's policies?

While this depends on a multitude of factors, early indications are that they will be considerably cheaper. Indeed, the chairman and CEO indicated that a property owner in a high-risk zone paying upwards of $5,000 a year could conceivably secure a policy through TypTap for half that price.

It will be interesting to see how many customers are ultimately drawn to this new approach to flood insurance and whether it lives up to expectations once the next big storm hits.

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