Who is this Lloyd guy in London and what does he have to do with flood insurance?

Lloyd’s of London Insurance

Lloyd’s of London also known as Lords of London and just simply Lloyd’s is one of the strongest financial entities in the world. As the name suggests, it is located in the financial district of London. 

Lloyd’s 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 Lloyd’s isn’t an insurance company. Lloyd’s 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.

Lloyd’s 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 Lloyd’s insured some things!

Things Lloyd’s of London Had Insured

For hundreds of years, Lloyd’s insured ships and buildings against fire. Then in the 19th century, a forward-thinking underwriter, Cuthbert Heath, started looking around to see what else Lloyd’s 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, Lloyd’s 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.

Lloyd’s of London Flood Insurance in the US

Not satisfied with insuring body parts, lake monsters, satellites, and such Lloyd’s 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.

Lloyd’s 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 Lloyd’s 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 Lloyd’s syndicate.

When you see this logo

then this is Lloyd’s flood insurance. 

Not All Private Insurance is Lloyd’s Flood Insurance

Not all private insurance is Lloyd’s of London flood insurance. And not all Lloyd’s flood insurance is the same. It depends on the Coverholder.

Confused?

Of course, you are! Flood insurance is confusing – but we Flood Nerds thrive on bringing order to the chaos of the flood insurance market. 

See it’s like this.

Every Coverholder has their own underwriting rules. One Coverholder may turn their nose up at the chance to insure your property while another Coverholder will jump on the opportunity. Flood Nerds know what the different Lloyd’s flood insurance underwriters want. That’s what makes us experts at matching your coverage needs with the company that has the best policy and price for you. 

Aside from Lloyd’s Coverholders, there are other insurance companies that offer flood insurance. When Flood Nerds shop for insurance, we shop for all options. 

WYO Private Insurance

Let’s take just a minute to cover the Write Your Own (WYO) type of private flood insurance. This is the flood insurance provided by Allstate, State Farm. Farmer’s, Geico, and many of the other large insurance companies. 

This isn’t Lloyd’s of London flood insurance. It is government flood insurance with a big insurance company logo on it. These companies sign a contract with the government that prohibits them from selling any other flood insurance but guarantees that they can charge those overpriced government rates. Great for the insurance company – not always so good for you.

How Lloyd’s Keeps the Cost of Flood Insurance Down

Syndicates are all about spreading the risk. And Lloyd’s flood insurance surely spreads the risk. They cover the entire globe! And if you think about it – when it comes to minimizing risks, it just makes sense. 

It is very unlikely that India will have a major flooding event at the same time as the United States and Africa.

Lloyd’s flood insurance banks on God’s promise not to flood the entire world again! They know the chances of paying out the whole world’s flood claim is probably about the same as paying out on the Loch Ness monster.  

Lloyd’s even reinsures the National Flood Insurance Program (NFIP) here in the US because it is now more than $25 billion dollars in Debt (that’s a B and a lot of zero’s -25,000,000,000). 

The NFIP uses old maps and political pressure to calculate the cost of insurance – that’s why they are in debt.

Lloyd’s flood insurance uses sophisticated technology here on Earth and with satellites in space. Accurate topography maps and fine-tuned algorithms allow the Lloyd’s Coverholders to more accurately calculate the cost of coverage. This modern approach saves homeowners and business owners thousands each year. 

Is Lloyd’s of London Flood Insurance Right for You?

If your home or property has never had a flood before and your cost of flood insurance is really high, Lloyd’s of London flood insurance may save you 20% – 50% over the NFIP option.

Once, a Flood Nerd saved someone $7000!

The only way to know if Lloyd’s flood insurance will save you money is to shop all the options. So, let a Flood Nerd do the dirty work for you. It’s free to get a quote. And while we’re at it, we’ll shop ALL your flood insurance options to make sure the Lloyd’s of London flood insurance price is the best one available. 

GET A FREE QUOTE - SEE IF LLOYDS OF LONDON FLOOD INSURANCE WILL SAVE YOU MONEY

States Where Lloyd’s of London Flood Insurance is Available

See your state on the list? Then Lloyd’s flood insurance may save you money. Let a Flood Nerd find out for you. 

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.

Don’t buy a Lemon. Let a Flood Nerd make an apples-to-apples comparison of all your flood insurance options, including Lloyd’s of London flood insurance.

ROBERT MURPHY

Robert Murphy is the Founder of Better Flood Insurance, a nationwide Flood Insurance Agency. He is the Head Flood Nerd and is passionate about teaching people the importance of flood insurance.