ACE USA, the U.S.-based retail operations of the ACE Group, today announced the release of a white paper exploring innovations in flood insurance protection brought to market since Superstorm Sandy made landfall in October, 2012. The new white paper, “Innovations in Flood Insurance Protection,” discusses the introduction of flood reinstatement coverage, which provides excess of loss insurance above the remaining limits of protection in the underlying property insurance policy. Following the catastrophic losses of Superstorm Sandy, many businesses were unable to obtain additional coverage, or were forced to reinstate limits of existing policies at much higher cost, stricter coverage terms or substantial increases in deductibles. Since Superstorm Sandy, massive flooding has also devastated the cities of Calgary and Toronto in Canada, as well as Boulder, Colorado. “In the aftermath of Superstorm Sandy, many corporate risk managers whose organizations had experienced a flood loss found their companies facing a new exposure — because the financial limits of their existing insurance policies were exhausted, they were responsible for additional financial losses in the event of another flood,” said Jeremiah Konz, Senior Vice President, ACE North American Property & Specialty Lines, and author of the new ACE white paper. “With flood reinstatement coverage now available, risk managers unable to acquire their customary policy limits at renewal have the option to buy coverage to build back or build additional high hazard flood limit for improved protection.” Risk managers now have the option to buy additional standalone flood insurance if the current coverage is renewed with decreased limits or sub-limits, or if the high-hazard flood deductible in the primary program has dramatically increased. In effect, the insurance augments the limits remaining in the insured’s property insurance policy, even in cases where the limits have been completely exhausted. The coverage terms, conditions and premium charged are based on each insured’s high-hazard flooding exposures. Additionally, in cases where a company building may be financed through a bank, inadequate insurance coverage can reduce the chances of obtaining favorable loan terms, if not eliminate it in its entirety. Flood limit reinstatement insurance provides an additional layer of financial protection to prevent this.
To access the paper, please visit our website. The material presented in this report is not intended to provide legal or other expert advice. It is presented as informational only. Readers should consult legal counsel or other technical experts, as applicable, with any specific questions they may have.ACE’s Specialty Catastrophe Unit seeks to understand and define client challenges to provide customized solutions that specifically address these needs. It is highly regarded for its creative responses to complicated market conditions, providing named storm deductible buydowns, offering multi-year insurance arrangements, and developing parametric triggered coverage for concentrated catastrophe exposures, in addition to the flood limit reinstatement policy. ACE’s Property & Specialty Lines Division offers comprehensive management solutions for the property, marine, inland marine, energy and aviation insurance needs of U.S.-based companies, ranging from mid-size domestic to large multinational, as well as provide customized fee-for-service engineering consulting for long-term client loss control solutions. For more information about our range of products and services, please visit our website . ACE USA is the U.S.-based retail operating division of the ACE Group, headed by ACE Limited, and is rated A+ (Superior) by A.M. Best Company and A+ (Strong) by Standard & Poor’s. ACE USA, through its underwriting companies, provides insurance products and services throughout the U.S. Additional information on ACE USA and its products and services can be found at www.acegroup.com/us . The ACE Group is one of the world’s largest multiline property and casualty insurers. With operations in 53 countries, ACE provides commercial and personal property and casualty insurance, personal accident supplemental health insurance, reinsurance, and life insurance to a diverse group of clients. ACE Limited, the parent company of the ACE Group, is listed on the New York Stock Exchange (NYSE: ACE) and is a component of the S&P 500 index. Additional information can be found at: www.acegroup.com .