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Neptune Flood offers expanded coverage

David Krakow

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St. Petersburg-based Neptune says it has approximately 175,000 customers in 48 states and Washington D.C. Photo: David Krakow.

In an effort to fill the gaps in flood insurance, St. Petersburg’s Neptune Flood announced this week that it will be providing excess insurance coverage for residential, condominium and commercial customers.

Neptune, the country’s largest public provider of flood insurance, is providing coverage over and above the limits available through the National Flood Insurance Program (NFIP). According to reports, the NFIP’s limits – $250,000 for residential and $500,000 for commercial – have not been modified in 25 years.

In that quarter century, the average price of a home has more than doubled.

“Our agents have been asking for excess coverage to help make up for the inadequacy in NFIP policies,” said Jean-Luc Eckstein, Neptune’s Chief Customer Officer in a prepared statement. “Until the subsidies from the NFIP go away, this new excess product can help ensure our customers get the coverage they need.”

Neptune said in a statement that it is offering up to $4 million in excess coverage for dwellings and another $500,000 for contents, protecting against losses in excess of the NFIP limits. The company said it is also adding new residential coverage categories including temporary living expenses; basement contents; unattached structures; poor repair and refills and replacement costs on contents.

For commercial customers, new categories include coverage for business interruption and building replacement costs.

According to the U.S. Government Accountability Office (GAO), over two million NFIP policies have yet to reach their Risk Rating 2.0 price, a method used to calculate a policyholder’s annual flood insurance cost using variables such as individual home value and flood risk.  

With Congress capping NFIP policy premium increases ato 18% for residential and 25% for commercial, many policies will take over a decade to reach their full price, according to Neptune.

“While most of these customers will be better served by Neptune’s standard flood policy once they reach their full NFIP price, in the interim, Neptune’s excess policy can close the coverage gap,” said Trevor Burgess, Neptune’s President and CEO in the prepared statement.

Neptune says it has approximately 175,000 customers in 48 states and Washington D.C. In November, the Catalyst reported that the results of a study Neptune commissioned revealed a wide knowledge gap in homeowners’ perception of their insurance coverage. The story reported that whereas around 73% of homeowners nationwide believe they have flood coverage, the number is closer to 5%.

The Catalyst reported that Neptune had reached $200 million in premiums, making it the nation’s largest alternative to the NFIP program. In August, Neptune landed at number 732 on the Inc. 5000 list, which recognizes companies’ year-over-year revenue growth.

The company is known for its digital platform, which it says makes it faster and easier for customers to obtain coverage. Up until 2012, banks and mortgage companies could only accept flood insurance from the NFIP. The Biggert-Waters Flood Insurance Reform Act that year allowed private insurers to enter the market.

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