FIPNC Chairman Rita Hollada Urges Local Approach to Loss Prevention - June 19, 2000

WASHINGTON -- Helping people protect their lives and property against the peril of damage by water should be a local effort that relies on education, according to M. Rita Hollada, CPCU, CIC, CPIA, Chairman of the Flood Insurance Producers National Committee (FIPNC).

Hollada, a member of the National Association of Professional Insurance Agents, made the remarks during a meeting of the Floodplain Management Forum June 8 in Washington, D.C. James Lee Witt, Director of the Federal Emergency Management Agency (FEMA), requested FIPNC's participation in the session designed to consider ways to further protect people and property from damage by water.

"We have a 'neighborhood crime watch,' so why not a 'neighborhood flood watch?'" said Hollada. "The new Be Flood Alert brand of the NFIP lends itself to so many opportunities. Subdivisions can stencil the Be Flood Alert logo on streets and curbs near storm drains which could be blocked. Areas subject to flash flooding from storm runoff could be marked by a Be Flood Alert road sign. Partner with insurance agencies to take education programs into the schools. Educate in small, local ways and the result is flood awareness in a big way."

"Water is everywhere," Hollada said. "One of the biggest stumbling blocks to awareness may simply be the use of the word 'flood.' It inspires images of a swollen river, not a swollen street. Flood evokes visions of a violent, storm driven sea, not the hillside gushing water from a violent downpour. Average people like you and me sit back smugly and say "it can't happen to me" because I don't live on the river or near the ocean."

Hollada also said the federal flood insurance program is in need of simplification. She said the flood insurance program as it exists today is too complex, noting that maps in use are outdated, with streets not named and entire subdivisions not identified. In addition, obtaining an elevation certificate for each specific property is a costly and time-consuming endeavor. Hollada also said the flood policy itself is replete with language and concepts not found in the remainder of the insurance industry and obscure rules that are incomprehensible by most agents, lenders and consumers.

"It is time for some creative thinking and simplification of the flood insurance mechanism," Hollada declared. "If the goal of this forum is to develop strategies that will increase the number of property owners who have some financial protection for the hazard of water damage, then lets look at possible alternatives to a bigger, more complex National Flood Insurance Program."

Another focus of possible reform is to reward those who take an active part in flood prevention and control by offering rating discounts and credits to individual property owners who employ flood mitigation techniques.

"My comments are in no way intended to be solutions," Hollada told the forum. "They are intended to be ideas. It is time to get creative. The definition of insanity is doing the same thing and expecting different results. Let's look for innovative and different solutions to the same old problem."

The National Association of Professional Insurance Agents chairs the Flood Insurance Producers National Committee (FIPNC) and has been an active participant since co-founding the committee in 1982. FIPNC is comprised of representatives of producer organizations dedicated to improving the National Flood Insurance Program through cooperation with the Federal Insurance and Mitigation Administration. The group provides expertise to federal policymakers in the areas of flood insurance product design and development, producer education and marketing.

Founded in 1931, PIA is a national trade association which represents more than 180,000 member insurance agents and their employees who sell and service all kinds of insurance, but specialize in coverage of automobiles, homes and businesses.

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