As an independent insurance agent in Texas, you work hard to help your clients understand their risks and their coverage options. One of those risks is flood damage. It’s a significant threat that many overlook, yet it has proven again and again to cause devastating financial losses.
According to FEMA, nearly 90% of all presidentially declared U.S. natural disasters involve flooding, and uninsured (or underinsured) property owners often face hefty repair costs. With natural disasters on the rise, every agency should offer flood insurance to its clients.
It’s to your advantage to discuss the coverage, especially to those in flood-prone areas or with valuable assets. One of the worst things a client can say is, “I would have purchased the coverage had my agent offered it to me”. Whether or not this is true, is often a matter for the courts.
So what should you do if after offering the coverage, the client declines flood insurance?
- Document their refusal/rejection of the coverage in writing.
- Better yet, have them sign a rejection form that confirms the coverage has been discussed and that they have chosen not to purchase the coverage.
- Establish a process to review this coverage with your clients every year through a coverage checklist
Proper documentation of their rejection helps protect you and your agency by providing clarity should an uncovered claim arise and your actions be called into question (e.g., an E&O claim).
