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July 16, 2025

USG Announces the Hire of Lynnette Banks in Montgomery, AL

USG Insurance Services, Inc., a prominent national wholesaler and MGA, is pleased to announce the addition of Lynnette Banks to their Georgia office. Banks joins the team as an Inside Producer/Broker, under the guidance of Bob Reardon, Director of National Business Development. usgBanks brings over 30 years of experience in the insurance industry, having started as a regulatory reporting clerk and progressing to the role of Commercial Underwriter, most recently with Southern Insurance Underwriters. Known for her dependability, expertise, dedication, and strong communication skills, Banks has a goal-oriented mindset that makes her an asset to any team. Her proven track record positions her as a standout professional, and she is sure to be a valuable addition to the team. This move is the most recent change that USG has implemented in its plan to continue expanding its operations nationally as a leading wholesaler brokerage firm. ABOUT USG USG is a national wholesale broker and managing general agent (MGA) with offices throughout the country. USG represents 300+ A rated carriers, both admitted and non-admitted and is an MGA for multiple top carriers, writing business in all states. USG's mission is to become the #1 provider of innovative solutions for the risk management industry, exceeding expectations with its advanced technology, creative problem solving, and research capabilities. LYNNETTE BANKS Inside Producer/Broker d: 813.466.3588 e: lbanks@usgins
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July 16, 2025

Fear of Inspections Leads Many Homeowners to Delay Insurance Claims, Survey Finds

Home ownership has become increasingly costly, with rising property taxes, insurance premiums, and maintenance expenses stretching household budgets. A growing number of homeowners are now delaying necessary repairs and skipping insurance claims due to financial pressures and fear of triggering inspections they might not pass.

Homeowners Are Postponing Repairs and Claims

A 2025 survey by Guardian Service, a company that helps consumers shop for insurance policies, found that more than 70% of homeowners have put off renovations this year. While budget constraints remain the primary reason, fear of filing an insurance claim — and the potential for a failed inspection — has also become a significant factor.

For this reason, nearly one in four homeowners admitted to avoiding a home insurance claim. The trend is even more pronounced among younger homeowners, with one-third of Gen Z respondents saying they were too nervous to file.

This reluctance to take action can lead to larger, costlier issues. Small problems, such as a minor leak or a loose shingle, can escalate into structural damage or mold if left unaddressed. In some cases, insurers may deny claims altogether if damage is found to be the result of neglect.

The Long-Term Costs of Avoiding Repairs

Delaying repairs often has compounding effects. What could have been a simple fix may turn into extensive, expensive damage over time. Additionally, future claims may be denied if an insurance company determines that a homeowner failed to disclose or maintain their property properly.

While some homeowners worry that filing a claim could increase their rates or prompt a policy review, avoiding claims altogether can be even more financially damaging. Over time, unrepaired issues typically grow more costly, and waiting too long can reduce the likelihood of receiving full coverage.

Which Repairs Are Being Delayed?

According to Guardian Service, homeowners reduced their home improvement budgets by an average of 42% in 2025, with two-thirds cutting those budgets entirely.

Most prioritize only essential fixes while postponing cosmetic updates such as painting, flooring, and decor — 48% of respondents reported delays. Even value-adding projects like kitchen and bathroom remodels are being shelved.

However, the delays in safety-related and critical system repairs are more concerning. Fewer than 25% of homeowners plan to move forward with window replacements, plumbing or electrical upgrades, or roof repairs this year. Even in the midst of record heat waves, 14% say they are delaying HVAC replacements.

DIY Repairs on the Rise

With professional labor costs climbing, more homeowners are turning to do-it-yourself repairs. About 62% reported tackling critical repairs themselves instead of hiring contractors.

Younger homeowners are leading this trend, with two-thirds of Gen Z and millennial homeowners using online tutorials and videos to guide their projects.

While DIY efforts can reduce upfront costs, they may create future complications if homeowners fail to notify their insurance provider about major upgrades. Without reporting these changes, extended or guaranteed replacement cost coverage — which provides extra funds if rebuilding costs exceed the policy’s stated amount — may no longer apply.

Hidden Insurance Rules and Missed Opportunities

One of the most common — and expensive — mistakes is neglecting to inform an insurer about major home upgrades. Renovations such as kitchen remodels, room additions, or even installing a new wood stove can alter a property’s value and risk profile. If these updates are not disclosed, they may not be covered under an existing policy.

Conversely, certain upgrades can actually help lower premiums. Nearly half of the surveyed homeowners said they would proceed with delayed projects if they knew it would reduce their insurance costs.

However, 71% of homeowners reported that their insurers had not clearly explained which improvements could lead to savings. Common premium-reducing upgrades include:

  • Installing a smart thermostat
  • Adding a central security system
  • Replacing old windows with storm-resistant models
  • Updating the roof
  • Implementing fireproofing measures, particularly in wildfire-prone areas

Because policies vary widely, experts recommend consulting with an insurance provider or licensed agent to understand which improvements can both enhance safety and lower monthly premiums.

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July 16, 2025

Cease and Desist Orders Issued in Alleged Unauthorized Health Insurance Scheme in California

Sacramento, CA — California Insurance Commissioner Ricardo Lara has issued a Cease and Desist Order against Innovative Partners, LP, for allegedly acting as an unauthorized insurance provider in the state. The Department of Insurance also issued 10 additional Cease and Desist Orders against related entities and individuals, both licensed and unlicensed, for their involvement in what officials described as a fraudulent health insurance operation.

According to the California Department of Insurance (CDI), Innovative Partners offered health coverage without a valid certificate of authority. The Department's investigation, initiated after receiving consumer complaints, found that the company began marketing limited or non-existent health coverage in 2023. Victims were reportedly misled into believing they were purchasing comprehensive health plans from legitimate providers like Blue Shield or Aetna, or through Covered California, the state’s health insurance marketplace.

Instead, policyholders received health plan ID cards bearing Innovative Partners branding. These often included references to other entities such as PHCS, Group Resources, First Health Network, and Marpai Administrators LLC. Some cards also listed contact information for Teladoc Health Inc.

Consumers reported being denied benefits they believed were included in their coverage. In one instance, a consumer who thought he had enrolled in an Aetna Gold PPO plan later discovered his mental health services were not covered, resulting in over $1,700 in out-of-pocket expenses. In another case, a small business owner was left with $11,000 in emergency room charges after being told his plan would cover two ER visits per year with a $50 co-pay.

The investigation further revealed that Innovative Partners marketed the plans as a “Small Employee Benefit Plan” under the Employee Retirement Income Security Act of 1974 (ERISA). However, the CDI stated that consumers had no employment or partnership relationship with the company.

Innovative Partners is not authorized to transact insurance business in California and lacks the necessary certification from the Department of Insurance. The Department is urging any consumers who purchased plans through Innovative Partners or affiliated individuals and entities to contact its office at (714) 712-7600.

Cease and Desist Orders were served to the following:

  • Innovative Partners, LP
  • Arman Motiwalla – License #4134341
  • Amani Shokry
  • Jimmie Sutton
  • Omar Kasani
  • Group Resources
  • First Health Network
  • MultiPlan Inc.
  • PHCS
  • Marpai Administrators LLC
  • Teladoc Health Inc.

The Department stated that it will continue to investigate the matter and take necessary enforcement actions to protect consumers.

Stay informed and ahead of the curve — explore more industry insights and program opportunities at ProgramBusiness.com.
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July 15, 2025

Vermont Farmers Struggle With Limited Crop Insurance Options Amid Increasing Disasters

Vermont farmers are facing growing challenges with crop insurance as unpredictable weather patterns continue to threaten agricultural operations. According to the Vermont Agency of Agriculture, roughly 70% of farms in the state carry no crop insurance, leaving many without financial protection when disaster strikes.

Limited Coverage and High Risks

Justin Rich of Burnt Rock Farm in Huntington lost $200,000 last year when floods devastated his riverside fields. Despite paying premiums to the federal government’s Noninsured Disaster Assistance Program (NAP), his payout amounted to just $3,000—less than two cents per dollar lost.

“It doesn’t work terribly well on smaller, medium-scale, diversified farms like ours,” Rich said.

NAP is designed for farmers who don’t qualify for federal subsidies on major crops such as corn, soybeans, or apples. Unlike traditional subsidized insurance plans offered through private providers, NAP is administered directly by the federal government.

For some farmers growing federally subsidized crops, the insurance proves more effective. Andrea Darrow, co-owner of Green Mountain Orchards in Putney, said subsidies for apples help make premiums affordable. When an unexpected frost in May 2023 destroyed 95% of her crop, the payout allowed the family-run orchard to recover and continue operating.

Most Vermont Farms Remain Uninsured

Despite such cases, the majority of Vermont farms remain uninsured. Rich noted he was surprised the figure wasn’t even higher, citing the state’s agricultural profile, which largely lacks conventional grain crops.

Even some dairy farmers who grow silage corn for feed choose to forgo insurance. Earl Ransom of Rockbottom Farm in Strafford called crop insurance a “scam” and relies on self-built resiliency measures, including avoiding riverbottom land and producing surplus feed.

“The only ideal form of insurance at this stage is to have a personal buffer of money, land, and crop yield,” Ransom said. For many, however, that’s not a realistic option.

Administrative Burdens and Pricing Issues

Vermont Agency of Agriculture Chief Operating Officer Nicole Dubuque highlighted long-standing concerns about the lack of affordable, accessible insurance options for small-scale growers.

Farmers also face high premiums and complex federal payout calculations. Prices are often based on national averages, which can undercut Vermont growers. When Rich lost his sweet potato crop last summer, he was compensated based on a national average price far lower than the cost of production in the state.

Rich also lost 34.5% of his potato crop, but because the payout threshold was 35%, he did not qualify for assistance despite paying higher premiums for extra coverage.

The administrative process itself can also be burdensome, with months-long wait times for payouts. Farmers who sell primarily through farm stands and informal markets often struggle to provide the required meticulous records.

“It is not a small amount of paperwork,” Rich said.

Alternative Support From the State

Hank Bissell of Lewis Creek Farm in Starksboro said he stopped pursuing federal insurance decades ago, calling it financially unhelpful. When floods hit in 2023 and 2024, he incurred $120,000 in uninsured losses.

Both Bissell and Rich turned to the Business Emergency Gap Assistance Program (BEGAP), administered by the state’s Agency of Commerce. BEGAP, though not an agriculture-specific program, provided timely relief.

“Very fast, very easy to apply for, and extremely useful for those of us affected,” Rich said. Bissell was able to recover 30% of his losses, preventing what could have been a financial disaster.

Legislative Efforts for Future Support

State lawmakers introduced a bill in the last legislative session to create a Farm Security Special Fund specifically for farmers. Sen. Ruth Hardy, D-Addison, cited the difficulties small farms face accessing existing aid and the impact of shifting climate patterns.

“Having a fund that is designed specifically for farmers is an important tool to keep local agriculture viable in our state,” Hardy said.

The bill stalled in the Appropriations Committee but may be revisited in a future session. Dubuque said expanded funding would help, though full recovery after a disaster would require significant resources.

Federal Alternatives and New Aid

Tom Zacharias, president of National Crop Insurance Services, suggested farmers explore other federal insurance options such as the Micro Farm Program and Whole-Farm Revenue Protection. However, a USDA report showed no payouts in Vermont for either program during the 2024 crop year, and many farmers viewed them as prohibitively expensive.

Meanwhile, U.S. Sen. Peter Welch, D-Vt., announced that Vermont farmers affected by natural disasters in 2023 and 2024 are eligible for expedited assistance through the USDA Supplemental Disaster Relief Program.

Over $16 billion from the 2025 American Relief Act will be distributed nationwide, but only farmers who previously participated in NAP or subsidized crop insurance in 2023 and 2024 can apply.

The Central Role of Small Farms

Dubuque emphasized the economic and cultural importance of Vermont’s small-scale farms, noting their contributions to both food production and tourism.

“Small farms in this state are so incredibly important to our economy,” she said.

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July 15, 2025

AI-Driven MGA Augmented UW Launches in London to Support Smart-Follow Insurance

Augmented UW Ltd., a new artificial intelligence-driven managing general agent (MGA), has officially launched in London, focusing on the growing smart-follow insurance market.

Company Leadership and Background

The MGA was founded by Daniel Prince, who previously served as CEO of Rethink Underwriting and is a long-standing figure in the London insurance market.

Focus on Smart-Follow Underwriting

Augmented UW will utilize AI-enhanced algorithmic underwriting to strengthen digital connections between insurance carriers and brokers. The company is targeting the smart-follow market, where follow underwriters — insurers who provide capacity alongside a lead underwriter — use automated rules and processes to decide which risks to underwrite.

Partnership with Artificial Labs

To support its technology platform, Augmented UW has partnered with Artificial Labs, a smart underwriting and placement insurtech. Artificial Labs will provide the software tools and technology needed for Augmented UW’s operations.

Digital Underwriting Solutions

Through its digital underwriting model, Augmented UW plans to enable brokers to build their own in-house follow panels in the London Market. The company’s approach combines data-driven enhanced underwriting with Lloyd’s follow capacity to deliver digital solutions for broker partners.

Prince stated that the company’s goal is to improve the broker–insurer relationship and introduce sustainable solutions in the London Market.

Technology and Market Goals

Prince emphasized that while the London market does not need to be rebuilt, it can benefit from technology that enhances efficiency and accuracy, reducing manual processes and human error.

Augmented UW intends to bind its first risk in the fourth quarter of 2025, initially targeting property and terrorism insurance before expanding into other product lines in 2026.

Strategy for Brokers and Insurers

The company’s platform is designed to help brokers create customized placement strategies. Prince described the solution as cost-effective, quick to implement, and configurable for both brokers and carriers.

He added that while London brokers and insurers already maintain strong strategic and tactical relationships, what is currently lacking is modern infrastructure and streamlined operations. Rather than providing a panel of capacity, Augmented UW aims to deliver the infrastructure required for digital trading.

Stay informed and ahead of the curve — explore more industry insights and program opportunities at ProgramBusiness.com.
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July 15, 2025

Decades of Data Show Texas Leads Nation in Flood Deaths

Texas continues to lead the nation in flood-related deaths, driven by its geography, population density, and vast size. Even before the recent Central Texas floods that claimed more than 100 lives, the state had long been the deadliest for flooding in the United States.

Historical Data Highlights the Risk

A 2021 study published in the journal Water reported that from 1959 to 2019, Texas accounted for 1,069 flood-related deaths. This represents nearly one-fifth of the total 5,724 fatalities from flooding across the Lower 48 states during that time. Louisiana ranked second, with approximately 370 fewer deaths than Texas.

Nationally, flooding is the second leading weather-related cause of death in the U.S., following heat. According to the National Oceanic and Atmospheric Administration (NOAA), flooding caused an average of 145 deaths annually over the past decade, both in 2024 and across the past 30 years.

Recent Central Texas Flooding

Earlier this month, flash floods swept through Central Texas, resulting in more than 100 fatalities. In a separate incident in San Antonio last month, 13 people died after heavy flooding, including 11 individuals who drove into high water.

Hatim Sharif, a professor of civil and environmental engineering at the University of Texas at San Antonio, noted that better integration of emergency action plans could have saved lives. Sharif advocates for systems that combine rainfall forecasts with real-time flood impact predictions, enabling officials to close vulnerable intersections and alert residents in advance.

Geography and Terrain Amplify Flood Risks

Texas’ unique terrain contributes significantly to its flood risks. The area known as “flash flood alley,” which includes the Texas Hill Country, is prone to rapid flooding due to steep hills and valleys.

Kate Abshire, lead for NOAA’s flash flood services, explained that hilly terrain produces rapid runoff and quick stream rises. Rocky and clay-heavy soils also worsen flooding, as they prevent water from absorbing into the ground. Urban development exacerbates these conditions, with concrete and asphalt surfaces reducing natural infiltration.

In addition to the terrain, the proximity to the Gulf of Mexico provides a constant source of moisture, intensifying rainfall and flood potential. Jeff Masters, a former government meteorologist and co-founder of Weather Underground, pointed out that the warm Gulf waters often fuel extreme precipitation events in the region.

Preventable Driving-Related Deaths

Sharif’s research highlights that 86% of flood-related deaths since 1959 involved individuals who were driving or walking into floodwaters. Nearly 58% of fatalities occurred in cars and trucks.

Texas has over 3,000 low-water crossings where roads intersect with streams and waterways without bridges or culverts, creating additional hazards. Many drivers, especially those in large vehicles like trucks and SUVs, underestimate the depth and speed of floodwaters, particularly at night.

Despite the widely promoted safety message, “Turn around, don’t drown,” studies show some motorists bypass barricades on flooded roads.

The recent July 4 floods were unusual in that many of the deaths occurred at a campsite where floodwaters overtook the victims. Historically, only 8% of flood fatalities have taken place in permanent homes, mobile homes, or camping areas.

Timing and Demographics

Flood deaths are more likely to occur at night, when visibility is low and residents may be unaware of warnings. Over half of flood-related fatalities since 1959 have happened during nighttime hours.

Demographically, about 62% of U.S. flood victims have been male. According to Sharif, this may reflect higher risk-taking behaviors, similar to patterns seen in fatal car accidents.

Continuing Calls for Action

Experts continue to call for improved flood warning systems and public education to reduce preventable deaths. Enhanced forecasting and real-time alerts could give communities critical time to react during flash flood events.

Stay informed and ahead of the curve — explore more industry insights and program opportunities at ProgramBusiness.com.
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July 14, 2025

2024 Marks Second Straight Year of ‘Very Strong’ P&C Results for Leading Global Reinsurers

A new peer group credit analysis by Fitch Ratings shows that 2024 marked the second consecutive year of "very strong" financial performance for major global reinsurers in the property and casualty (P&C) sector, driven by sustained underwriting profitability and solid investment income in a prolonged favorable market environment.

The analysis covers some of the industry’s largest reinsurers, including Hannover Re, Lloyd’s of London, Munich Re, PartnerRe, SCOR, and Swiss Re.

According to Fitch, the average reported return on equity (ROE) for the group was a robust 14% in 2024. While this reflects a decline from the 2023 cycle peak of 20%, the performance remains notably strong.

Favorable renewal terms and a lower incidence of large losses than expected contributed to the continued strength of the P&C reinsurance segment in 2024.

Life and health reinsurance also posted strong overall results, with the exception of SCOR, which was affected by adverse changes in its reserving assumptions.

Investment performance improved across all companies, supported by elevated bond yields for the second year in a row. While earnings in Q1 2025 were slightly weaker compared to Q1 2024, they remained strong, underpinned by resilient performance across most business lines. This strength helped mitigate the financial impact of the Los Angeles wildfires.

Fitch also reported that solvency coverage remained broadly stable for these reinsurers in 2024. Most maintained solvency well above target ranges, with Munich Re and Hannover Re holding the largest capital buffers.

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July 14, 2025

State Farm Announces 27% Home Insurance Rate Increase in Illinois

Effective August 2025, State Farm will implement a significant rate increase for Illinois homeowners, raising home insurance premiums by an average of 27%. The company confirmed the change in an email to CBS News Chicago and cited financial strain as the driving factor.

According to State Farm, the decision to raise rates stems from the insurer paying out more in claims than it receives in premiums. In 2024, the company reported that for every dollar collected from homeowners, it paid out $1.26 in total costs. The insurer attributed this imbalance in part to rising inflation and an uptick in severe weather events. Notably, Illinois recorded the second-highest number of hail damage claims in the country, behind only Texas.

Auto Insurance Rates to Drop

While home insurance premiums are set to rise, State Farm announced a decrease in auto insurance rates for Illinois customers. The company stated that auto premiums will drop by an average of 5.7%, with some policyholders seeing reductions as high as 15%.

State Response

Illinois Governor JB Pritzker issued a statement expressing concern over the rate hike. He described the increase as “unfair and arbitrary,” alleging that the justification—catastrophe losses—contradicts the analysis of the Illinois Department of Insurance. The governor suggested that the insurer may be shifting out-of-state costs onto Illinois policyholders.

In addition to higher premiums, Governor Pritzker noted that State Farm also plans to increase out-of-pocket deductibles and reduce certain claim payouts. He stated that these combined changes would result in Illinois homeowners paying hundreds more annually without what he described as a state-based justification or additional coverage.

The governor announced he has directed the Illinois Department of Insurance to pursue all available regulatory actions and urged the General Assembly to consider legislation during the upcoming veto session aimed at preventing what he called “severe and unnecessary rate hikes.”

Next Steps

As of now, the rate changes are scheduled to take effect in August. The Illinois Department of Insurance has not released an independent statement in response. State Farm has not issued additional comments beyond those originally shared.

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July 14, 2025

FEMA Remains Intact as White House Shifts Toward State-Led Disaster Response

As reported in The Washington Post, the Trump administration is no longer pursuing plans to abolish the Federal Emergency Management Agency (FEMA), according to senior officials. While initial statements from President Donald Trump and Homeland Security Secretary Kristi L. Noem suggested a full elimination of the agency was under consideration, recent developments indicate the administration is opting for a shift in strategy rather than dissolution.

Rebranding FEMA’s Role

A senior White House official stated that no official steps are being taken to dismantle FEMA. Instead, the agency may undergo a “rebranding” to emphasize a greater leadership role for state officials during disaster response efforts.

“You’re already seeing the theory taking place in Texas,” the official said, referring to the federal government’s quick financial assistance following the deadly floods in the state. President Trump visited the flood-affected areas last week, where he met with first responders, family members of victims, and local officials, including Governor Greg Abbott.

FEMA Review Council and Upcoming Report

The FEMA Review Council, established by executive order earlier in Trump’s second term, has convened twice and is expected to release a report in November. The report will include recommendations on how to improve the nation’s federal disaster response framework.

A second White House official described the council’s recent meeting in New Orleans as “productive,” noting widespread public engagement.

According to White House spokeswoman Abigail Jackson, the council will recommend reforms that align FEMA’s role with the scale of a given disaster. She added that the agency’s current structure has created “a bloated bureaucracy that disincentivized state investment in their own resilience.”

Mixed Reactions from Officials and Observers

Press Secretary Karoline Leavitt reiterated that the administration is still discussing how to structure federal disaster response going forward. She emphasized that the president supports ensuring citizens receive needed assistance, whether from federal or state sources.

However, delays in deploying FEMA’s specialized search and rescue teams during the recent Texas floods have drawn criticism from current and former agency employees. They cited administrative spending and contract restrictions as contributing factors.

Federal spending on disaster relief has increased significantly in recent years. The Government Accountability Office (GAO) reported that in 2024 alone, the United States experienced 27 major disasters exceeding $1 billion in damages each. Over the past decade, the federal government has spent more than $550 billion on disaster response.

Public Support for a Federal Role

Polling conducted by the Associated Press and NORC indicates that most Americans support a substantial federal role in disaster recovery. Eighty percent of Republicans and 87 percent of Democrats said the federal government should play a major role in aiding communities after disasters. Seventy-four percent supported a major role in rebuilding efforts.

Despite this support, debates continue over the appropriate scope of FEMA’s involvement. Trump has stated he prefers a model in which the federal government provides funding but state governments make key decisions. He has expressed skepticism about the effectiveness of federal workers who are unfamiliar with local conditions.

Plans for Future FEMA Operations

Tricia McLaughlin, Assistant Secretary of Homeland Security, said FEMA “as it is today, will no longer exist.” She emphasized a transition to a leaner, more responsive system that prioritizes state-led efforts. The FEMA Review Council is currently developing a comprehensive plan for implementing necessary changes.

Some state officials, such as North Carolina Representative Jake Johnson, advocate for a block grant system that would direct federal funds straight to the states. Johnson criticized FEMA’s bureaucratic processes and expressed confidence that states could handle disaster response independently with sufficient federal funding.

At the same time, other state emergency management leaders say a strong federal role remains essential, especially for smaller or under-resourced communities. One unnamed official stated they felt “far more comfortable” after recent conversations with the review council, indicating confidence in the ongoing evaluation process.

Conclusion

While the Trump administration initially floated the idea of eliminating FEMA, current indications suggest the agency will instead undergo structural and operational changes aimed at increasing state authority in disaster response. The FEMA Review Council’s forthcoming report in November will likely provide further guidance on the agency’s future.

Stay informed and ahead of the curve — explore more industry insights and program opportunities at ProgramBusiness.com.
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July 11, 2025

Insurance Rates Surge in Red Sea Following Fatal Ship Attacks

The cost of insuring commercial vessels transiting the Red Sea has more than doubled in recent days following deadly maritime attacks by Yemen’s Houthi forces, according to multiple industry sources.

War Risk Premiums Jump After Period of Calm

The escalation in insurance costs follows two recent fatal incidents. On Monday, a Greek-operated ship was sunk, and on Wednesday, a separate attack on the Greek ship Eternity C resulted in the deaths of four crew members. These events marked a return to heightened aggression in the region after several months of relative calm.

War risk premiums for Red Sea voyages have increased from approximately 0.3% to 0.7% of a vessel's value, with some underwriters quoting rates as high as 1% for a seven-day period. This matches the peak pricing levels seen earlier in 2024 when near-daily attacks were occurring. The increase translates to hundreds of thousands of dollars in added costs per shipment.

Vessel Attacks Prompt Coverage Reassessments

Sources indicate that some underwriters have temporarily halted coverage for voyages in the region due to safety concerns. Neil Roberts, head of marine and aviation at the Lloyd’s Market Association, noted, “The recent attacks in the Red Sea have highlighted the need for caution when considering a transit.”

Marine officials reported that the Eternity C was carrying 25 crew members when it was attacked. Four crew members were confirmed dead, with others rescued and some still unaccounted for. Houthi forces claimed responsibility and reported detaining several of the missing crew.

Targeting Patterns Reemerge

The uptick in aggression comes after over 100 vessel attacks were recorded from November 2023 through December 2024. In May 2025, the United States announced an agreement to cease airstrikes against the Houthis in exchange for a halt in maritime attacks. However, the Houthis later stated that the arrangement did not apply to vessels associated with Israel.

Shipping data reveals that the targeted vessels had sister ships that made port calls in Israel over the past year. Underwriters are reportedly exercising increased caution, with many avoiding coverage for vessels with any perceived connection to Israel.

Munro Anderson, head of operations at Vessel Protect, a marine war risk insurance provider, stated: “What we have seen in the last week appears to be … a return to mid-2024 targeting criteria, which essentially involves any vessel with even a remote Israeli connection. With ambiguity comes risk.”

Strategic Waterway Faces Operational Pressure

The Red Sea, a vital artery for global oil and commodity shipments, has seen a significant drop in maritime traffic due to the ongoing conflict. As the security situation continues to evolve, shipping companies and insurers are closely monitoring developments and adjusting their policies accordingly.

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July 11, 2025

California Bill Seeks Greater Transparency in Insurance Drone Imagery Use

A bill moving through the California Senate Insurance Committee aims to strengthen consumer protections related to insurance companies’ use of drone and satellite imagery to evaluate properties. The proposed legislation focuses on improving transparency and ensuring policyholders are informed about how such images influence their insurance status.

Legislative Details and Requirements

The bill, introduced by Assemblymember Lisa Calderon (D–Los Angeles), would regulate how insurers utilize aerial imagery in lieu of in-person inspections. If enacted, the law would require insurance companies to:

  • Notify policyholders that aerial images may be taken of their property.
  • Provide those images upon request within 30 days.
  • Limit the use of aerial imagery to photos taken within the past 180 days.

The legislation is a response to reports from homeowners who have received non-renewal notices based on drone or satellite images that were allegedly inaccurate or outdated.

Concerns About Data Accuracy and Fairness

Josephine Figueroa, Deputy Commissioner at the California Department of Insurance, testified that insurers have used imagery as old as 18 months to make underwriting decisions. She noted that the practice raises concerns about transparency and data accuracy.

“Policyholders should not have to fight to know when their property is being surveyed,” Figueroa said, adding that homeowners deserve clarity on how image-based data is used in coverage determinations.

Under the bill, homeowners would also have the right to request an in-person inspection if they dispute a decision based on aerial photos. However, the bill does not require insurers to give advance notice before conducting aerial inspections, nor does it allow policyholders to opt out of the practice.

Industry Response

Representatives of the insurance industry have expressed opposition to the bill, citing potential impacts on affordability and operational efficiency. According to Allison Adey, a lobbyist for the Personal Insurance Federation of California, drone and satellite inspections offer a low-cost alternative to physical site visits.

“In-person inspections can cost between $75 and $100,” Adey said in a May hearing. “Aerial imaging is a mere fraction of that cost.”

Adey argued that limiting the use of aerial technology may restrict insurers’ capacity to process policies efficiently and could increase overall insurance costs.

Data Privacy Issues

The bill also faces criticism from privacy advocates. Becca Cramer-Mowder, a lobbyist with the Privacy Rights Clearinghouse, voiced concerns that the legislation does not adequately address the handling of personal data collected through drone imagery.

According to Cramer-Mowder, insurance companies may sell these images to third-party data brokers, with potential consequences ranging from compromised sanctuary protections to increased vulnerability for individuals facing stalking or criminal targeting.

The bill currently lacks provisions for:

  • Maximum retention periods for stored images.
  • Mandatory deletion protocols.
  • Requirements to blur individuals, neighboring properties, or limit usage beyond insurance.

“This bill legitimizes a surveillance practice that most homeowners are unaware of,” Cramer-Mowder said, warning of broader implications beyond insurance impacts.

Next Steps

Members of the Senate Insurance Committee acknowledged the privacy concerns raised during the hearing and stated they would continue working with opponents of the bill. The proposed legislation now moves to the Judiciary Committee for further consideration.

Stay informed and ahead of the curve — explore more industry insights and program opportunities at ProgramBusiness.com.
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July 11, 2025

Flooding Is Not Just a Coastal Threat

Flooding is often associated with coastal or high-risk areas, but recent events continue to show it can happen virtually anywhere. According to FEMA’s National Flood Insurance Program (NFIP), 99% of U.S. counties have experienced at least one flood event in the past 20 years. Roughly 40% of NFIP claims come from properties outside designated high-risk flood zones.

The recent flash floods in Texas’ Hill Country serve as a high-profile example. More than 100 people died along the Guadalupe River over the July Fourth weekend. President Donald Trump signed a federal disaster declaration for Kerr County on Sunday.

Despite the scale of the disaster, only 2.5% of homeowners in Kerr County had flood insurance, according to the Insurance Information Institute. Nationwide, just 3.3% of households had a flood insurance policy through the NFIP as of late 2024, based on data analyzed by Value Penguin.

Coverage Gaps Leave Homeowners Vulnerable

Loretta Worters, spokesperson for the Insurance Information Institute, stated that “flood insurance is not just for coastal or high-risk areas.” She added, “Every home can be exposed.”

In 2024, Hurricane Helene caused extensive flooding in Asheville, North Carolina — a mountainous region where less than 1% of households were covered by NFIP policies, according to the Swiss Re Institute.

Central North Carolina experienced additional flash flooding during the recent holiday weekend as Tropical Storm Chantal moved inland. State officials called it the most significant flooding event in several decades.

Why Floods Are Not Covered by Standard Policies

Flood damage is typically excluded from standard homeowners insurance policies. Daniel Schwarcz, a law professor at the University of Minnesota, explained that insurers avoid risks that lead to “highly correlated losses,” such as floods and earthquakes, because they often result in widespread claims at once.

Homeowners policies may cover certain types of water damage, such as a burst pipe, but do not cover damage from rising water levels, including flash floods.

Options for Flood Insurance

Homeowners seeking flood protection must purchase a separate policy. The NFIP offers up to $250,000 in coverage for residential building damage and up to $100,000 for contents. As of 2024, the NFIP had over 4.7 million policies in force, providing more than $1.28 trillion in coverage.

Worters noted that excess flood insurance is available through private insurers for homes that require higher coverage than what the NFIP provides. She also advised that NFIP policies typically have a 30-day waiting period before becoming active.

Private Flood Insurance Gains Ground

Private insurers are increasingly offering standalone flood insurance, driven by improved risk modeling. According to LendingTree, using 2023 data from S&P Global, the average cost of private flood insurance is $98 per month. In comparison, 2025 NFIP rate data reviewed by NerdWallet found that FEMA-backed policies average $75 per month.

Premiums can vary significantly depending on location and risk. Karl Susman of Susman Insurance Services emphasized the importance of comparing both NFIP and private options. Schwarcz agreed, stating that private insurers use different rating models, which can sometimes lead to lower premiums.

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