WNC offers private commercial flood
policy that is an alternative to national flood
H.I.R.E., the crafty acronym for a jobs bill that was
shaping up for vote in late February, was killed by Senate
leaders before reaching the floor in hopes of garnering more
support with a scaled-back version down the road. But buried
deep in that proposal was a provision that has become
all-too-familiar for property insurers, brokers and owners in
recent months: reauthorization of the National Flood Insurance
The NFIP was set to expire Feb. 28, and was extended for a
month. Sources predict another extension after it has already
been extended four other times since the original expiration
date last September. Regardless, further extensions will do
nothing to improve the problems that have pervaded the
embattled NFIP. The truth is that a slew of coverage and rating
issues coupled with a huge deficit—more than $20 billion
since 2005—has kept the NFIP’s future uncertain for
the last few years. If it were indeed sent to the firing squad,
the “never saw it coming” position would be tough
From his office in Miami, far from the debate, Norman
Heinrich, executive vice president of voluntary and excess
products for WNC Insurance Services, recalls his years of
experience with Mother Nature’s most pervasive peril.
“The risk of flooding, the exposures, hasn’t
changed much in 25 years,” he says.
Very few in this industry understand flood risk like
Heinrich, a veteran underwriter and flood expert who has
overseen the creation of flood programs for some of the
industry’s largest players. Recently, almost as if in
preparation of the NFIP’s demise, Heinrich helped
spearhead WNC’s Commercial Flood Insurance Program as an
alternative to the NFIP.
The Miami-based WNC Insurance Services is an MGA, MGU and
program administrator for various products that serve
commercial and personal insureds. The program administrator
moniker best describes the company’s role in distributing
the Commercial Flood Insurance Program, a surplus lines product
for voluntary coverage backed by Lloyds.
“In some states we write directly with retailers. In
others, we place through wholesalers. In some areas we might
use both,” he says.
Distribution decisions depend on two factors: state law and
“Retailers and wholesalers that have been good to us
over the years are the ones we will distribute through,”
Heinrich says. “We don’t want to water this product
down with overexposure to the market.”
WNC began accepting applications and offering quotes for the
program in January. “Most calls have been coming in from
where you would expect, places like Florida, California, Texas,
New York and the Carolinas; areas traditionally heavy in flood
risk,” he says. “However, we are open in all
Heinrich says the program does not intend to establish a
major presence in Gulf Coast states until lingering litigation
issues there are resolved. “We can write there on a
select basis,” he explains.
The program is a substitute for, not excess over, the NFIP.
Commercial insureds can purchase a single policy that mirrors
the coverage of the NFIP policy with a few notable exceptions.
Higher limits are available for building and contents, up to $5
million and $1 million respectively, well beyond the $500,000
ceiling of the NFIP. The ability to schedule locations, a
replacement cost valuation for building and contents as well as
multiple deductible options, ranging from $5,000 to $100,000,
further separate this program from the historically inflexible
government counterpart. Perhaps most notable is the
program’s inclusion of business income coverage, an
option that has never existed through the NFIP.
“We attach a standard business income policy to
accounts we write in the program, rated for the peril of flood,
up to $100,000 in coverage,” Heinrich says.
“There’s very little competition in the marketplace
on a single policy format. This program writes the risk from