Bridging the Flood Insurance Gap: Flood Risk Solutions’ Mission Fulfilled Through Latest Innovative Program

With the longstanding flood insurance coverage gap, Flood Risk Solutions (FRS) has committed to developing an affordable, accessible solution for homeowners in low-to-moderate risk areas.

Flooding is one of the most prevalent and costly natural disasters in the United States, yet only a small percentage of homeowners have flood insurance coverage. When a flood occurs, this gap could financially devastate millions. Flood Risk Solutions, aiming to make flood insurance more accessible and affordable for residential and commercial property owners nationwide, has introduced the Preferred Risk Policy™ (PRP).

Since Brendan Moeller and Eugene Podokshik founded the company in 2017, FRS has consistently offered tech-savvy distribution partners flood programs. It has leveraged proprietary technology to deliver these through a user-friendly web-based portal and API integrations. 

Years of providing flood insurance integrations have enabled FRS to recognize the factors that have fed the decades-old flood insurance gap. Firstly, due to concerns about cost, over 80% of households in the U.S. lack flood insurance. There’s also a common misconception that homeowners’ standard insurance policies cover flood damage. Many forgo separate flood coverage because of this.

In addition, many existing flood insurance products are designed to meet the requirements for mortgage compliance. What does this mean? The products primarily focus on high-risk zones and overlook the needs of those in low-to-moderate-risk areas. A significant segment of the population is, therefore, not adequately protected. The fact that more than 40% of the National Flood Insurance Program (NFIP) flood losses occur outside high-risk zones highlights the problem with this model. 

Curiously, although flood events have only increased in frequency and severity, the flood insurance market has remained relatively stagnant for decades. Its size has barely kept pace with inflation. The market has struggled to expand even as private insurers entered. Podokshik has seen how the entrance of private insurers has merely redistributed market share rather than expanding overall coverage. 

“The industry thought the market could grow as private insurers have shown more interest in providing flood coverage in recent years,” said Podokshik. “But in reality, actual growth has been minimal.” FRS has acknowledged that innovative solutions are needed to bridge the existing insurance gap, particularly in regard to the phenomenon where a substantial portion of flood losses occur in areas not usually considered high-risk.

As a technology-driven Managing General Agent (MGA), FRS developed the Preferred Risk Policy to offer affordable flood coverage for properties in non-high-hazard flood zones. This innovative program provides reasonable coverage limits to address a market need traditional policies—which usually start at higher premiums and coverage amounts—have failed to meet. 

Obtaining a PRP is easy. Premiums start as low as $50 and can go up to $200, depending on the selected coverage limits, with payment plans available starting at only $5 per month. A consumer quoting tool can also be embedded on agents’ websites where owners can then obtain quotes and bind policies directly in under a minute. Agents, MGAs, and homeowner insurers have the ability to partner with FRS and batch rate entire books of business, and FRS actively seeks such partnership to enhance accessibility and efficiency. This streamlined approach is made possible by advanced flood insurance analytics and modeling.

Flood Risk Solutions can effectively bridge the flood insurance gap through the Preferred Risk Policy, given that it can make coverage more affordable and accessible to homeowners previously underserved by traditional policies. The lower coverage limits cater to those who may not require extensive protection but still wish to safeguard against potential flood-related damages.

The PRP’s impact can be immense. Besides empowering individual policyholders, communities can become more resilient to flood events. The financial burden on government disaster relief programs and taxpayers can then also be reduced. In addition, the overall risk pool can diversify, as more homeowners in low-to-moderate-risk areas obtain coverage. This could lead to more stable and reduced premiums. Essentially, sharing the risks across the board aligns with the foundational principles of insurance and nurtures a more prepared society when facing natural disasters. 

Podokshik stresses, “This serves as a strong test case for whether the flood insurance gap can ever be closed. If demand doesn’t increase at these price points, we may need to reconsider our approach. For example, given that over 40% of flood losses occur outside designated flood zones, and people still aren’t purchasing affordable coverage, we might have to fund disaster recovery through other means.”

While the longstanding flood insurance gap remains, Flood Risk Solutions has launched the Preferred Risk Policy to contribute to addressing it by offering affordable, accessible, and tailored coverage options that protect individual homeowners and help achieve the broader goal of making society more resilient against flooding events.

About Flood Risk Solutions (FRS)

Flood Risk Solutions (FRS) is a leading provider of state-of-the-art insurance solutions designed to mitigate residential and commercial risks across the United States. Our core mission is to offer not only flood insurance products but also a comprehensive suite of solutions tailored to meet the diverse needs of our clients. For more information, visit https://www.floodsol.com.