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Write Your Own Carrier and NFIP Direct: Whats the Difference?

January 9th, 2020 | 3 min read

By Chris Greene



Almost everyone has heard that all flood insurance is the same and it all goes through FEMA. While technically this is not true because there is the National Flood Insurance Program and private flood insurance markets.

Today we want to talk about some different ways that you can obtain flood insurance through the National Flood Insurance Program.

There basically two ways to obtain flood insurance through the National Flood Insurance Program

  1. Write Your Own companies
  2. NFIP Direct

There is no wrong way to obtain flood insurance, the only bad decision is not getting it at all. So we want to discuss the benefits of each one of these paths.

Electrical outlet reflected in floodwater in office

Let's discuss what a Write Your Own carrier is? The guidelines they must follow and a list of companies that participate?

First of a Write Your Own carrier also known as (WYO) is participating property and casualty insurance companies to write and service the standard flood policies in their own names.

It's important to remember while these carriers are writing these policies FEMA still retains the responsibility for underwriting losses. Since this is still part of the National Flood Insurance Program there are strict guidelines that must be followed.

Some of those guidelines are as follows

  1. Policy administration
  2. Claims processing
  3. Reports
  4. Operations plan
  5. Time standards
  6. Policy issuance
  7. Discontinue of policies when NFIP is not authorized
  8. Keep flood insurance funds separate from company funds
  9. The Company must investigate, adjust, settle, and defend all claims or losses arising from policies issued under this Arrangement. Payment of flood insurance claims by the Company bind FEMA, subject to appeal.
  10. Compliance with Agency Standards and Guidelines.
  11. Compliance with Appeals Process
  12. Other Flood Insurance. If the Company also offers flood insurance outside of the NFIP in any geographic area in which Program authorizes the purchase of flood insurance, the Company must:
    1. Ensure that all public communications (whether written, recorded, electronic, or other) regarding non-NFIP flood insurance lines would not lead a reasonable person to believe that the NFIP, FEMA, or the Federal Government in any way endorses, sponsors, oversees, regulates, or otherwise has any connection with the non-NFIP flood insurance line. The Company may assure compliance with this requirement by prominently including in such communications the following statement: “This insurance product is not affiliated with the National Flood Insurance Program.”
    2. Ensure that data related to this Arrangement are not used to further or support the Company's non-NFIP flood insurance lines
      Governance on Blue Puzzle on White Background.

While this is not all the guidelines you can see that NFIP has strict guidelines for participating in this program. According to FEMA this program was set up in 1983 with three goals in mind

  1. Increase the NFIP policy base and the geographic distribution of policies
  2. Improve service to NFIP policyholders through the infusion of insurance industry knowledge
  3. Provide the insurance industry with direct operating experience with flood insurance

The WYO program has come along way since 1983 its important that you know what companies participate so you are protected.

There are more than 55 different companies that participate in this program and you can find the list here.

Two women and team work in big storehouse

As you can see there can be some great benefits to this program like dealing directly with your existing insurance company for your flood insurance policy, dealing with an experienced company during the claims process, and also having a good experience when making payments or changes.

So now that we have looked at WYO let's discuss what NFIP direct is and some of its benefits?

NFIP Direct is the system that FEMA has built where agents can directly access the NFIP without going through a WYO carrier. Payments, claims processing, and policy issuance are just a few things the system does.

One of the negatives of using NFIP Direct is if someone who doesn't have flood training or experience can struggle with using it. This is one of the major benefits of using a WYO. This is also one reason why many agents who can only access NFIP Direct sell less flood insurance than those who access a WYO.

You can call it intimidation or just a headache like many agents do.

So is there any benefit for the consumer?

Business man pointing the text Customer Experience

Whether the customer decides to use a WYO or NFIP Direct then the rates and claims processing should be the same. You may just have a better experience with a WYO because of the way they communicate.

So is there a benefit to the agent?

There are usually a few benefits first of all commissions are normally higher through a WYO compared to going through NFIP Direct. There are also normally a lot more opportunities to learn the system and get the support that you need as an agent.

So whether you access WYO or NFIP Direct whats important is that you have a policy in place. According to the FEMA podcast the last 10 years have shown a steady decrease in the amount of active flood insurance policies and a steady increase in the amount of claims filed.

So if you have questions about either one of these platforms then make sure to visit our website. You can also check out our daily flood education videos on our YouTube channel or Facebook page. You can also tune into our daily podcast.


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Chris Greene