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Flooding: Everyone is Exposed, Few are Insured, But New Options Entice

8 ADJUSTINGTODAY.COM formerly the Mutual Services Office. Like ISO, MSO is a property/casualty advisory organization licensed in 48 states to file policy forms and advisory loss costs on behalf of its member insurance companies. As its name suggests, the MSO Inland Flood Coverage, developed in conjunction with Munich Re, is available for adding flood coverage to residential property policies in inland areas and is not intended for coastal properties facing storm surge. Under the endorsement, part of the overall building and personal property limits is made available to address flood loss, subject to per-occurrence and aggregate limits. The flood coverage falls within and does not add to the base policy property limits. Within the MSO flood coverage limits there are per-occurrence and aggregate sublimits for (1) personal property in basements and (2) increased expense and loss of rental income. In addition, there is an aggregate limit for losses due to fungi and mold, a condition that often arises following a flood. Again, the sublimits are part of and do not add to the flood limits, which are also applied within the basic policy limits. The purpose of the initiative — which Munich Re has undertaken with other advisory organizations — is not to add to the amount of insurance but to allow some of it to be directed to flood loss. This spares homeowners insurers and their policyholders the frustration of having no coverage at all in place following a flood loss. The Jury is Out Whether this and other initiatives will significantly expand the number of properties insured for flood remains to be seen. But it’s clear that more and more property owners have insurance options for protecting themselves against flood losses.