In the letter, the Department says recent natural disasters and changing weather patterns show that flood prone areas and even geographical regions not usually associated with floods can be besieged by flood waters. Nearly 95% of all communities in New York State have qualified to participate in the National Flood Insurance Program, making homeowners residing in these participating communities eligible to purchase federal flood insurance. Unfortunately, in the past, some homeowners learned that they had no flood coverage only after a devastating flood.
Many insureds may be unaware that their homeowners and dwelling fire policies do not cover flood damage. Consumers may not realize that a separate federal flood insurance policy must be purchased to protect against the peril of flood and mudslides caused by flood. New York residents currently receive a notice that discusses (a) the exclusion of flood loss in their regular homeowners policies and (b) the availability of a federally-insured program. Section 3444 of the Insurance Law formerly provided that an insured receive a flood notice only at policy issuance. The recent amendment to Section 3444 now provides that "the policyholder notice required by this section shall accompany all new homeowners and dwelling fire personal lines policies and all renewal homeowners and dwelling fire personal lines policies."
The letter must tell homeowners that their policies (a) do not provide coverage for loss caused by flood or mudslide; and (b) flood insurance is available under separate policies issued pursuant to the National Flood Insurance Program. The notice also must include information regarding flood insurance eligibility and access, and must be worded in a manner that does not alarm insureds or entice them into purchasing unnecessary coverage.
To comply with the rule, insurers may use: a “clear and conspicuous” disclosure notice, either the one provided by the Superintendent or another notice filed with and approved by the Superintendent that satisfies requirements under the rule.