Convenience is the real draw, along with reduced complexity that comes with opting for an endorsement. As Piechowski explained, the upfront benefits for the agent and the policyholder are already apparent — but the benefits are there on the backend too.
“On the off-chance that a loss does occur, you create an environment where you’re only working with one carrier,” he told IB. “With that carrier, not only are you able to file one claim and work with them on the flood component, you are also able to work with them for any other type of peril that may have caused additional damage or created an exposure issue.”
It is a scenario that Piechowski sees pretty regularly at Munich Re US, especially regarding basement damages and water backup concerns.
“When something like that happens, there is a real need to understand what coverage falls where and how things will play out. With endorsements, you are likely working with one claims adjuster rather than multiple, meaning they are able to simplify the potential back and forth that you see when working separately with flood adjusters and claim inspectors.”
Historically, customers who are risk adverse typically have the desire to make sure they are covered when the worst happens. As a result, they generally purchase appropriate, affordable optional coverages to ensure protection.
“By adding an endorsement instead of self-insuring, your insureds have a $50 to $100 premium to cover tens of thousands of dollars should a flood event occur compared to paying it out on their own — and taking a significant hit to their wallet.”
This benefit, as Piechowski told IB, is seen in two ways. The first is a single premium: the base premium with an optional endorsement versus standalone coverages. The second is having that assurance and coverage when an event does occur.
By partnering with Munich Re US, carriers can offer the Personal Lines Inland Flood Coverage Endorsement, a white-label, customized flood solution, to property owners outside of the special flood hazard area (SFHA).