Lloyds of London Flood Insurance
Who is this Lloyd guy in London and what does he have to do with flood insurance?
Lloyds of London Insurance
Lloyds of London also known as Lords of London and just simply Lloyds is one of the strongest financial entities in the world. As the name suggests, it is located in the financial district of London.
Lloyds of London is the very first modern insurer. They have been around since 1688, and A.M. Best gives them the strongest rating possible (A+). When it comes to insurance, they know what they are doing.
But Lloyds isn’t an insurance company. Lloyds of London isn’t even a single company. They are a corporate body governed by the Lloyd’s Act of 1871 and subsequent Acts of Parliament.
Lloyds of London is a marketplace for syndicates. Syndicates are companies or individuals that come together to pool their capital and spread the risk of insuring a thing. And boy oh boy has Lloyds insured some things!
Things Lloyds of London Had Insured
For hundreds of years, Lloyds insured ships and buildings against fire. Then in the 19th century, a forward-thinking underwriter, Cuthbert Heath, started looking around to see what else Lloyds could insure to grab a little publicity.
Mr. Heath insured those vaccinated against smallpox that they would not contract the disease. This encouraged more people to be vaccinated and helped halt an outbreak of smallpox in Britain. He insured a monkey in a vaudeville act and when it died, he paid out the claim, claimed the monkey’s body, and had it stuffed and installed in his office.
Over the years, Lloyds of London has insured:
Betty Grable’s legs for $1 million each
Keith Richard’s hands for $1.6 million
Bruce Springstein’s voice for $6 million
Dolly Parton’s breasts for $4 million
Then there was the time Cutty Sark whisky company held a contest offering one million pounds to the person(s) that could capture the Loch Ness monster. Lloyds of London underwrote the reward, provided they were allowed to keep Nessie once captured.
Lloyds of London Flood Insurance in the US
Not satisfied with insuring body parts, lake monsters, satellites, and such Lloyds flood insurance became available as soon as Congress acted to make it possible.
The Homeowners Flood Insurance Affordability Act (HFIAA), passed in 2014, ended the 50-year monopoly the federal government held on the flood insurance market. The act was a move to finally create a stable, private flood insurance market for property in the US.
Lloyds of London flood insurance started out small in the US. There were just a few Coverholders in 2014. A Coverholder is a company that’s authorized by a Lloyds Managing Agent to enter into a contract underwritten by the syndicate. That’s a bunch of complicated words to say that the insurance is backed by the financial strength of the Lloyds syndicate.
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