After Hurricane Harvey, a devastating Category 4 storm that hit Texas and Louisiana in 2017, causing catastrophic flooding, Neptune Flood experienced a major increase in Houston as people swarmed to get flood insurance – and now the St. Petersburg-based insurer is seeing another surge with Hurricane Ian.
Neptune Flood, founded in 2016 and launched in 2018, merges technology, math algorithms and industry expertise to create an intuitive platform that offers on-demand coverage.
The insurer quadrupled its activity in determining quotes for people over the last week, before Hurricane Ian made landfall Wednesday along the Gulf and wreaked havoc on Fort Myers and Naples.
“This is really a wake-up call. We’ve seen afterward these types of storms, there’s a large increase in activity. Houston has become one of our largest markets since experiencing the devastating impacts from Hurricane Harvey and we are also still seeing elevated demand from New Jersey since Hurricane Sandy,” Neptune Flood CEO Trevor Burgess said. “The great thing about Neptune is the decision-making takes place in the cloud and people can get instantaneous responses.”
Neptune Flood was able to evacuate its employees to Miami and Cape Cod, where Burgess is currently working. Burgess offered his employees a $1,000 incentive to evacuate, and they can work remotely.
Burgess said employees will gradually return to the office.
Neptune has 130,000 policies overall and over 30,000 in Florida and is St. Pete’s fastest-growing company.
Burgess is encouraging clients to file claims as soon as possible regarding damage from the storm surge.
“If you live in Florida, regardless of if you live on the water, you need flood insurance,” he said.
Many homeowners turn to Neptune and the private market to ensure appropriate coverage for major events like Hurricane Ian, as Neptune’s limit is up to $4 million while the National Flood Insurance Program (NFIP) offers a maximum limit of $250,000 in coverage in areas such as Tampa Bay.
For someone in a high flood zone to be accepted by a bank, they need the proper policy, and companies such as Neptune meet the banking regulations and use the same form NFIP does, Burgess said.
Neptune’s flood policies also become effective after a 10-day period while NFIP has a 30-day period.
“Over the next couple of days, we will begin to process the claims from policyholders and adjusters are assigned. We will be on the path of rebuilding if you think about the homes that will need to be rebuilt from water and wind damage, and we are already facing a shortage of lumber, supply chain issues and inflation.”
Hurricane Ian, which is said to have been the worst storm Florida has faced in a century, is estimated to have caused over $30 billion worth of damages, Mark Friedlander, Insurance Information Institute (Triple-i) director of corporate communications, told the St. Pete Catalyst.
The amount is a premature estimate, but it would make Hurricane Ian one of the most severe loss events in U.S. history. For comparison, Hurricane Irma caused $33 billion worth of damage in 2017 and experts believe the total for Hurricane Ian can surpass that, according to Tripe-i.
“The Florida property insurance market was the most unstable in the U.S. before Hurricane Ian arrived and now this will cause even more devastation. This is the type of natural disaster event that can lead companies into insolvency,” he said.
There are a handful of insurance companies on a watch list, hanging on the edge of a cliff for survival.
If a company a customer has does fail, FIGA (Florida Insurance Guaranty Association) pays those outstanding claims.
Wednesday morning, the city announced federal Florida disaster funds were declared for nine Florida counties, including Pinellas, which allows impacted individuals to apply for grants for temporary housing and essential home repairs and low-cost loans to cover uninsured property losses.
However, Friedlander explained people shouldn’t turn to FEMA (Federal Emergency Management Agency) dollars expecting it to completely cover all of the damages.
“One of the concerns is that more than 80% of Florida homeowners don’t carry flood insurance and when they suffer a flood loss, they turn to FEMA. FEMA is not an insurer,” Friedlander said.
Gov. Ron DeSantis also addressed the issue of the glaring gap during a Wednesday conference.
“Just because you’re not in a flood zone does not mean that you’re not at risk of a catastrophic event like this,” DeSantis said. “This is an issue we’re going to have to deal with.”
However, DeSantis also said the state-run Citizens Property Insurance will have enough surplus to pay claims without needing to place assessments on its customers or other policyholders in the state.
Florida has the most flood policies than any other state; however, it is the largest insurance gap, and homeowners who have paid off their mortgage aren’t required to have homeowners’, which is commonly how homeowners acquire flood insurance and file claims.
With or without insurance and aid from programs, the state is in for the long haul.
“Based on other strong hurricane events, it takes years to completely recover from major hurricanes there are still areas in the panhandle recovering from Hurricane Michael,” Friedlander said.