Washington Warns Green Valley Residents about Flood Insurance

With a recent check showing that fewer than 1 in 4 of the buildings in the Green River flood plain have federal flood insurance, state Insurance Commissioner Mike Kreidler is strongly urging more owners and renters to buy flood coverage as soon as possible.

“Recent work on the Howard Hanson Dam has lowered the risk of catastrophic flooding in the valley. That’s the good news,” Kreidler said. “But the risk of flooding is still significantly higher than normal. Getting this relatively low-cost coverage can protect against major losses.”

It’s important to act quickly, he said. Flood season in Washington is already here, and the National Flood Insurance Program (NFIP) coverage generally doesn’t take effect until 30 days after a policy is written.

Also, FEMA is revising its flood maps. In the Green River Valley, the new maps will likely broaden the areas considered high-risk zones. The new maps take effect in September 2010. Under the NFIP’s “grandfather rule,” however, people in areas considered moderate- to low-risk zones can buy coverage now and lock in those lower rates, even after the new maps take effect. The average flood insurance policy from NFIP costs $540 a year.

According to the NFIP, as of Sept 30, 21.4 percent of all structures in the Green River flood plain were insured through the federal program, which is the primary source of flood coverage for most homeowners and many businesses. Some 474 of the area’s commercial structures and 2,642 homes are covered. Statewide, only 16.5 percent of all at-risk structures have federal flood coverage.

One little-known aspect of the federal program is that it also offers coverage to renters. Residential premiums start as low as $39 a year for contents-only coverage.

“Renters shouldn’t assume that their apartment owner’s insurance will cover their losses, because it generally doesn’t,” said Kreidler. “A flooded apartment can easily lead to thousands of dollars in damages. Renters have to protect themselves, too.”

Congress established the National Flood Insurance Program in 1968 to provide an insurance alternative to federal disaster assistance after major floods. The Federal Emergency Management Agency administers the NFIP, although the policies are sold and adjusted by thousands of private-sector insurance agents, brokers and adjusters.

The policies cover up to $250,000 for residential structures and $100,000 for contents. Businesses can buy up to $500,000 in coverage for a building and $500,000 for contents. And renters can buy up to $100,000 in coverage for their belongings.

Property owners needing more coverage than that, such as businesses, generally have to purchase “excess” coverage through a surplus lines insurance broker. These policies can be very hard to find now – and very expensive — in the Green River Valley. And such policies often require the buyer to first have federal flood coverage.

Kreidler’s office is urging private insurers to keep selling policies in the area, and is seeking legislation that would allow his office to intervene when an insurance market dries up.

“We’re doing what we can under current law,” said Kreidler. “But I strongly – strongly – urge Green River Valley residents to get federal flood coverage.”