Application of Storm Surge and Precipitation Flood Options

Touchstone applies storm surge and precipitation flood differently depending on the following two conditions:

• Whether you code your contract and/or location data specifically to include the storm surge peril (PSH or PAL - all licensed perils) or the precipitation flood peril (PPH or PAL - all licensed perils) when you import or add this data for a contract or location

• Whether you enable the Storm Surge or Precipitation Flood check box in the Perils area on the Analysis Settings pane when you configure a Detailed Loss Analysis.

The combination of each of the options for these two conditions results in the following four scenarios:

Contract/Location Coded for Storm Surge Peril (PSH or PAL) / Precipitation Flood Peril (PPH or PAL)?	Storm Surge / Precipitation Flood Check Box in Detailed Loss Analysis Configuration Enabled?	Result
Yes	No	Touchstone does not include any storm surge / precipitation flood losses.
Yes	Yes	Touchstone runs the storm surge / precipitation flood model and includes 100% of storm surge / precipitation flood losses in the analysis results.
No	No	Touchstone does not include any storm surge / precipitation flood losses.
No	Yes	Touchstone runs the storm surge / precipitation flood model and adds the percentage of storm surge / precipitation flood losses, as specified in the Storm Surge Options dialog box or Precipitation Flood Options dialog box, to the wind losses in the analysis results. Note: If the Storm Surge and Precipitation Flood Options sub-perils are not explicitly coded in your exposure data, you must select the Wind peril when configuring the loss analysis. You cannot get surge or precipitation flood leakage losses independently of Wind losses.

If a contract or location is not specifically covered for storm surge or precipitation flood, you may choose to configure a Detailed Loss Analysis to include a percentage of storm surge or precipitation flood losses by line of business for the following reasons:

• You may choose to assume that you will pay some storm surge or precipitation flood losses, even if your policies do not specifically cover this peril. This condition is called "leakage" and typically applies to residential policies.

• You may not have the precise details that specify exactly which perils every policy covers. Therefore, you may want to assume that a certain percentage of your risks have storm surge or precipitation flood coverage. This condition typically applies to commercial policies or aggregate data.