Massachusetts Law Would Cut Flood Insurance Costs, but Raise Risk

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  • These days, many Americans may be very worried indeed about the high cost of flood insurance on top of what they already pay for standard home policies, because these can add thousands of dollars to their costs annually. Massachusetts recently took steps to improve those situations for people who have to take on such coverage, but those who are actually impacted by flooding might end up facing even higher costs. For these reasons, insurance agents in the state might want to do a little more work to help those affected by these changing laws to understand what’s going on with their coverage, and what they can do to potentially reduce risk.

    The Massachusetts state legislature recently passed a bill designed to help a large number of residents reduce their flood insurance bills, but insurance companies and other financial institutions now say that those who file a claim will have to pay far more out of pocket when they suffer damage, according to a report from the Boston Globe. In all, some 58,000 properties across the state are affected by this rule, which states that mortgage lenders have to allow consumers to get flood insurance that covers only the value of their home loan, and not the overall property value.

    How much savings could be realized?
    The tens of thousands of properties affected paid an average of more than $1,300 for their flood insurance premiums this year, up 11 percent from 2013’s number, the report said. It is currently unclear, though, exactly how much residents would be able to save when this new law is fully implemented, and some experts have estimated that the amount could be as small as just $50 annually, but as much as $1,000, depending on a number of different factors that would vary from one owner to the next.

    If insurance agents can do a little bit more to help consumers understand what they’re paying for and why when it comes to their coverage, they’re likely to be able to cultivate stronger ongoing relationships with their clients. In fact, many polls show that consumers actually value a strong relationship and high-quality customer service more than they like to receive discounts for their coverage, and any professionals who can strike a balance here might be able to significantly boost their retention and customer satisfaction rates.