In response to a provision of 2004's Bunning-Bereuter-Blumenauer Flood Insurance Reform Act, more and more states require all insurance agents who sell flood policies to meet minimum training requirements. Since state insurance departments have authority over agent licensing and continuing education (CE), FEMA is encouraging states to incorporate flood insurance training into those processes.

Insurance officials in numerous states have already implemented regulations that establish flood insurance training requirements. As of June 1, 2006, Delaware, Kentucky, Maryland, Massachusetts and Washington require agents who sell flood insurance to complete a flood insurance training course, for which they receive CE credits. North Carolina, Pennsylvania, and Texas each promote flood insurance training and provide CE credits for completion. FEMA is monitoring states' actions on this issue and posting state-by-state developments on the FEMA website.

To support states in implementing their new training requirements, FEMA provides access to NFIP training materials, technical assistance, and other resources. Meanwhile, the NFIP offers incentives to encourage agents to pursue the training. For example: The NFIP's Agent Co-Op Program reimburses a portion of agents' advertising budgets when they use the program's pre-approved ad templates. Now, agents who have completed a state-approved flood insurance training course within the past 12 months can receive an additional 25% in co-op funds. (For details, go to www.floodsmart.gov and register at the secure site for agents.)

Agents who enroll in the NFIP's Agent Leads Referral Program receive free leads generated through FloodSmart marketing efforts. A plan is being developed that will give agents who have completed flood insurance training a special designation or priority in the distribution of leads.

In a related issue, a Mississippi judge recently found there was insufficient evidence to support a couple's claim that their insurance agent misled them regarding the need for flood insurance. Paul and Julie Leonard of Pascagoula filed a lawsuit in October against Nationwide Mutual Insurance Company, claiming that their homeowners policy was supposed to provide full coverage for hurricane (Katrina) damage to their home, and that their insurance agent told them in 1999 they did not need to purchase separate flood insurance.

In an opinion issued earlier this month, Judge L.T. Senter Jr. ruled that the Leonards' policy specifically excluded flood damage and that there was insufficient evidence that the insurance agent had misled them about flood insurance. Read more...