Claims Flowing in Following Pacific Northwest Rains, Floods

In storm-ravaged parts of the Northwest, home and business owners are beginning to file insurance claims — a process that could be complicated by whether severe winds or floods did the damage.

Insurers say they’ve received hundreds of claims from consumers, whose homes and businesses were affected by powerful Pacific storms that smashed ashore along the Oregon, Washington and British Columbian coasts in early December and brought hurricane-force winds, torrential rains and widespread flooding.

During the height of the storms, winds generated seas up to 48 feet high in some areas, while soaking rain and wailing winds broke trees and cut off electricity. At least two people died, and several interstate highways were closed. Coast Guard and Navy rescue helicopters were dispatched to rescue people stranded at home. Sewage treatment plants became overwhelmed and water systems contaminated. Mudslides blocked roads and caused resident evacuations. And several counties in Washington and Oregon were declared Federal Disaster Areas.

“It’s pretty bad (damage),” said Jerry Davies, spokesman for Farmers Insurance Group of Companies in the week after the storm. “We’ve been on top of it, and right now we’re looking pretty good.” His company reported receiving more than 600 claims following the storms.

Immediate assessments by Washington Gov. Chris Gregoire indicated that there was at least $1 billion in damage in the state. The state Transportation Department announced at least $1 million would be needed for repair or cleanup needs.

In Oregon, the toll was heavy for many businesses and homeowners at the center of the storm, with the estimate already at $145 million. In Astoria alone, an estimated 150 commercial properties and 596 homes suffered damage.

Yet most insurers say the damage estimates are far from final, as people are slowly reporting claims throughout the Northwest.

“Damage in terms of dollars is unknown,” said Darrin Sanger, communications director for the NW Insurance Council. “Companies believe they will have a stronger perspective on insured losses and the extent of the damage in the coming weeks as customers continue to file claims.”

While homeowners insurance covers most wind damage, and people have flood coverage if they purchased flood insurance from the National Flood Insurance Program or their mortgage companies required them to carry flood insurance, federal officials say many people fail to insure against flooding — although it is the top natural disaster.

“You don’t need to live in a flood plain to have flood insurance,” said Mike Howard, director of external affairs for the Federal Emergency Management Agency in Oregon, Washington, Idaho and Alaska.

FEMA said there are just slightly more than 6,000 flood insurance policies, covering more than $1 billion, in the five Oregon counties President Bush declared a federal disaster. In western Washington, which spans 14 counties, FEMA said there are just more than 27,000 policies in place with more than $5 billion in coverage.

Even if they have coverage, some consumers worry about rate increases or policy cancellations if they submit a claim.

As such, the Oregon Department of Consumer and Business Services issued an emergency order prohibiting insurers from canceling or not renewing policies until Jan. 3, 2008, in the state’s five hardest-hit affected counties while people recover.

The order also directed insurers to withdraw and reissue any notices of cancellations issued or mailed the week preceding Dec. 3, 2007, and prohibits insurers from canceling or not renewing a policy solely because of a claim resulting from the winter storm.

“The storm has disrupted the lives of many Oregonians, and as a result, many of them may not receive a cancellation notice or may not be able to pay their insurance premiums on time,” said Carl Lundberg, acting administrator of the DCBS Insurance Division. “We want to ensure no one loses insurance coverage because of the storm.”

While cost estimates are still preliminary, the insurers likely to be most affected include State Farm, Hartford Fire & Casualty, Assurant, Zurich and Allstate.

According to the National Association of Insurance Commissioner’s report on marketshare published in 2007, State Farm held the highest percentage of the federal flood market in Oregon, with 20.32 percent. Hartford had 19.31 percent marketshare, followed by Assurant, with 17.6 percent of the market. State Farm held the largest percentage of the homeowners market with 25.11 percent, followed by Zurich with 18.99 percent and Allstate with 10.94 percent.

In Washington, Hartford had the largest part of the flood market at 19.28 percent, followed by Assurant with 16.6 percent and Zurich with 15.39 percent. For homeowners coverage, State Farm led the market with 17.97 percent, followed by Zurich with 17.04 percent and Allstate with 13.41 percent.

The Associated Press contributed to this article.