CHICAGO (Dow Jones/AP) ? Going against the trend of insurers cutting back coverage for homeowners who live in storm-exposed areas, Chubb Corporation said yesterday it will begin offering excess flood coverage policies for the coasts of Florida, New York and other states.

The new policies cover water damage from hurricanes, storms and other types of flooding and is meant to supplement the National Flood Insurance Programme that has largely replaced the private market in first-dollar flood protection.

The offer to cover hurricane flood damage puts Warren, New Jersey-based Chubb at odds with other insurers, who are cutting back in the area.

After a record-breaking 2005 storm season, insurers and risk modelling companies came to believe that coming years will have more hurricanes than average, and that coastal areas as far north as New York could be more vulnerable to a big storm than generally thought.

Allstate Corp., the second-largest homeowners insurer nationwide, has been the most aggressive in cutting its exposure to huge hurricane losses. Earlier this year, it said it will stop writing new homeowners policies in New Jersey, Connecticut and Delaware, and is cutting back in Florida and coastal New York.

Chubb, whose home insurance market share is far smaller than Allstate?s, primarily insures more upscale homes whose owners may find the $250,000 building damage limit of the national flood programme inadequate.

?This is something our customers have demanded of us,? said Peter Spicer, new product manager, Chubb Personal Insurance, who credited Hurricane Katrina with drawing homeowners? attention to the problem of inadequate coverage.

But at the same time that homeowners are clamoring for more coverage, ?you see carriers making adjustments to portfolios because new catastrophe models are suggesting they are more exposed than they thought they were?.

Chubb customers who decide to add on the coverage will get a bill in the general range of $5,000 to $7,000 annually for $1 million to $2 million of coverage, Spicer said. That is on top of their regular homeowners policy and federal flood insurance, he said. The policies are available in 15 states and will eventually be available in a few more.

Although the price tag is substantial, he said customers who investigate their national flood coverage are typically receptive to the idea ?when they realise how little coverage they get on the government policy,? Spicer said.

He also said the Chubb policy offered extras such as coverage for additional living expenses if a house is rendered uninhabitable by flooding. Earlier this year, Chubb began offering first-dollar flood coverage in some areas, but not for homeowners near a coastline.

The active hurricane season last year, along with news coverage of major insurers who are dropping coverage ?opens a door,? for Chubb agents to talk to their customers about the new policy, and perhaps make a sale, he said. ?It is an unfilled need.?

Shares of Chubb rose 23 cents to close yesterday at $51.84 on the New York Stock Exchange.