Businesses struggling to find flood coverage due to a weakened dam in south King County may soon get some help, thanks to a bill signed into law yesterday by Gov. Chris Gregoire.
Within minutes of the bill signing, Insurance Commissioner Mike Kreidler called on more than 150 insurance companies to voluntarily form a “Market Assistance Plan” (MAP), under the oversight of Kreidler’s office, to help businesses get flood coverage. The bill is ESHB 2560.
Due to concerns about potential flooding below the Howard Hanson Dam, some Green River Valley businesses have said that they can’t find adequate flood coverage. To avoid stressing the dam, the U.S. Army Corps of Engineers has said it temporarily may release more water than usual. Recent work has reduced the chance of serious flooding to 1 in 33. But a complete fix is expected to take at least several years, contingent on federal funding.
“We’re essentially trying to set up a matchmaking service that pairs businesses wanting coverage with insurers willing to sell it,” said Kreidler. “This region is a key part of the state’s economy, with billions of dollars in property and tens of thousands of jobs. We want to make sure that businesses can get the coverage they need to manage this temporary risk.”
The voluntary Market Assistance Plan is the first of several potential steps approved by lawmakers and Gov. Chris Gregoire to help bolster flood coverage in the valley. If the voluntary approach doesn’t work, Kreidler has the authority to compel insurers to form a “joint underwriting association,” which would act as an insurer of last resort.
“The good news is that for most homeowners and some businesses, the federally-run National Flood Insurance Program provides adequate coverage,” said Kreidler. “And that coverage is widely available and relatively inexpensive. We strongly encourage Green River Valley residents to consider signing up for that first.”
Since federal coverage is capped at $500,000 per structure and $500,000 for contents, however, it’s often not enough for businesses. Also, the federal program doesn’t provide business-interruption coverage, which can be critical.
“I hope this voluntary approach works, but it will depend largely upon how many insurers participate,” said Kreidler. “If necessary, we’ll take additional steps.”
For more information, including a copy of Kreidler’s letter to insurers, a list of companies that received it, and frequently asked questions about the plan, please see http://www.insurance.wa.gov/MAP.shtml