Posts Tagged ‘flood insurance’

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Iowa Communities Choose to Opt Out of National Flood Insurance Program

July 8th, 2010 by Iris | Comments Off | Filed in flood insurance

Last week, Congress voted to reauthorize the National Flood Insurance Program, and on July 2nd, President Obama signed the extension into law, keeping it active until September 30th, but not everyone is taking advantage of the reinitiated program, especially in Iowa.

According to government officials, only eighteen cities and counties in Iowa have joined the NFIP since the floods that soaked their state two years ago. Why not? Because of paperwork and money.

Specifically, local officials say, the participating communities are required to adopt and enforce flood plain management ordinances in order to reduce damage from future floods, and that process either takes too much red tape, or would increase insurance costs to home- and business owners.

Unless their communities agree to participate in the national flood insurance program, residents of those communities cannot purchase federal flood insurance. This year, 113 Iowa cities and counties within flood hazard areas have chosen not to participate, down from 131 non-participating communities in 2008.

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National Flood Insurance Program Reauthorized…Again

June 23rd, 2010 by Iris | Comments Off | Filed in flood insurance

The House of Representatives has passed another temporary extension of the National Flood Insurance Program until Sept. 30, 2010.

The program has been suspended since May 31st, making the issue of new policies impossible. In this extension, reauthorization provisions have been embedded into legislation relating to jobless benefits and tax breaks – legislation that the Senate has already voted down twice.

The newly-passed House bill, HR 5569, was sponsored by Representative Maxine Waters (D – CA) and Representative Walter Jones (R – NC) but the Senate must still act upon it.

The Independent Insurance Agents and Brokers of America (Big “I”) commended the House for its vote and urged the Senate to act quickly.

Charles Symington, Big “I” senior vice president of government affairs, told the press. “The program has been expired since May 31, putting millions of consumers at risk from the economic dangers of flood right in the midst of the hurricane season and storm season in the Midwest. The expiration has also threatened to wreak havoc in both the real estate and insurance markets during a period of great economic difficulty. It is vital that the program be extended and we therefore urge the Senate to act on this bill without delay.”

Since the end of May, the program has not been able to issue new or renewal flood policies, though it has still been paying claims for existing policy holders. This is the fourth time in the last year that the program has been interrupted because Congress failed to reauthorize it for an extended length of time.

The Big “I” and other industry groups hope that Congress will move beyond temporary extensions and pass legislation that authorizes the program for five years and makes certain reforms to it.

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Oklahoma Spring Storms Lead to Insurance Headaches

June 21st, 2010 by Iris | 1 Comment | Filed in flood insurance, homeowners insurance

Property owners and insurers in Oklahoma are all suffering the effects of recent severe flooding and extensive damage from last month’s wind storms, the Insurance Journal reports. The heavy rains earlier this month caused additional damage to the homes of some residents who had yet to make repairs made necessary by violent storms in May.

Most mainline commercial insurance companies don’t offer flood insurance, which must be purchased through the National Flood Insurance Program, a division of FEMA, but those people who don’t have mortgages which require flood coverage may not be aware they need it.

Jerry Johns, president of Southwestern Insurance Information Service told reporters, “What’s sad is to see someone who thinks their homeowners’ insurance covers flooding – and a lot of people do – to realize that everything has been destroyed and they have to pay to replace it.” However, he explained, the average auto insurance policy that includes comprehensive coverage will pay for flood damage to vehicles, so motorists with flood-damaged cars would be well advised to file claims sooner rather than later.

Kim Holland, Oklahoma’s Insurance Commissioner, declared an emergency in May, after two different storm systems caused damaging wind, hail, and tornadoes. The move was designed to make it easier for out-of-state insurance adjusters to obtain licenses. The Insurance Department issued roughly 2,000 such licenses last month, including 500 that were temporary, expiring in 90 days, said spokesperson Jennie Kleese.

Holland estimated that the May storms caused about $1 billion in insured damage.

Johns, who is based in Houston, TX , said that Oklahoma has certainly had its share of catastrophes this spring. He said, “The only thing you don’t have are hurricanes but don’t rule that out.”

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Red River Flood Protection Plan to Stay on Original Course

May 28th, 2010 by Iris | Comments Off | Filed in flood insurance

The Insurance Journal is reporting that the group studying the Red River diversion project in the Fargo, ND and Moorhead, MN area has decided to stay with its original plan, despite that fact that it may not offer the level of flood protection initially claimed.

Comprised of officials from both sides of the river, the Metro Flood Study Work Group had voted three months ago to endorse a 35,000 cubic feet-per-second channel on the North Dakota side of the river. Originally, that $1.46 billion project was expected to provide flood protection to a 500-year flood level, but more recent estimates from the U.S. Army Corps of Engineers show different data, with the possibility of higher river levels.

Aaron Snyder, the Corps project manager, explained to the group that a larger diversion study could take up to two months, and would “pretty much guarantee” that the group would miss the December deadline for Congress, but added that it may be possible to increase the scale of the project after Washington has granted its approval. “Right now, it’s important to move forward. There’s options to go bigger later,” Snyder said.

The last two springs have seen areas residents fighting massive floods, including 2009’s record-setting crest which damaged hundreds of homes and forced thousands of people to evacuate. Last summer, Fargo, ND voters indicated their support of the flood protection project, by voting for a half-cent sales tax increase, to offset the local share of the project’s cost. The preliminary estimates had the federal government paying $886 million, which left the other $626 million the responsibility of local authorities.

The corps is under an extremely tight timetable because Congress is expected to approve a major water projects bill – the first since 2002 – next year.

The corps is under a tight timetable because Congress is expected to approve a major water projects bill next year, the first since 2002.

“We want to stay on task and stay on time,” said Kevin Mahoney, Fargo’s deputy mayor.

Snyder said that the group had planned a discussion of the feasibility study and environmental impact statement on the North Dakota project, but the report was been delayed a week. The report in question will outline the project’s scope. Using current estimates, the plan as it stands now would provide flood protection “in excess of 100 years,” he explained. City and county leaders, however, are adamant about wanting 500-year protection.

“Things can always change,” Snyder said. “The U.S. Congress can always authorize something different as we move forward.”

It is not known if this project will impact flood insurance requirements for communities along the river.

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NHC Begins Tracking First Storm of the Season – Before Hurricane Season Officially Starts

May 26th, 2010 by Iris | Comments Off | Filed in flood insurance

The official beginning of the 2010 Atlantic season is still a week away, but according to Reuters the The U.S. National Hurricane Center has already begun tracking the first low pressure system of the year, reminding commodities and energy traders to be prepared for the hurricane season, which begins June 1 and ends November 30.

On Sunday, the NHC started tracking the non-tropical low which was then about 475 miles southwest of Bermuda. By Monday morning the storm was producing disorganized rain showers and thunderstorms over a large portion of the southwestern Atlantic Ocean.

According to storm trackers, the system has a medium chance (30%) of becoming a subtropical cyclone in the next 48 hours, as it moves north-northwest toward the Gulf of Mexico, and away from Florida, at a slow pace.

The official 2010 hurricane season forecast will be released by NOAA (the U.S. National Oceanic and Atmospheric Administration) on Thursday. This forecast is watched by the energy and commodity markets for signs of any potential disruptions to oil and gas installations in the Gulf of Mexico, due to weather during hurricane season.

Even though the official forecast has not yet been made public, many meteorologists are predicting that this year will bring an “unusually destructive” hurricane season, which could significantly impact efforts to clean up BP’s oil spill in the Gulf of Mexico.

State officials in Florida, Louisiana, and Texas are urging home- and business owners in coastal areas to confirm that adequate flood insurance and hurricane protections are in force before anything happens.

Some meteorologists have already predicted conditions are ripe for an unusually destructive hurricane season, which could also disrupt efforts to clean up BP’s oil spill in the Gulf of Mexico.

Commodities traders also watch for storms that could damage agriculture crops such as citrus and cotton in Florida and other states along the coast to Texas.

In addition, the path of a storm can affect pricing of insurance-linked securities, which transfer insurance risks associated with natural disasters to capital markets investors.

Read more: http://www.insurancejournal.com/news/national/2010/05/25/110138.htm#ixzz0p61XSa3p

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FEMA Discounts Flood Insurance for Homeowners Affected by Remapping

May 24th, 2010 by Iris | Comments Off | Filed in flood insurance, insurance news

Homeowners across the United States who are concerned that they may be required to purchase flood insurance due to a recent push to redraw floodplain maps can relax a little; they’re being offered the mandatory coverage at a deep discount for two years.

Senator Dick Durbin of Illinois said recently that the Federal Emergency Management Agency(FEMA)’s decision to offer lower rates on properties affected by changes to the flood maps significantly reduces the financial impact to property owners in southwestern Illinois and other affected regions, at least for now.

FEMA has agreed that up to two years’ eligibility for the National Flood Insurance Program’s lowest-priced option, the Preferred Risk Policy, will be offered to small businesses and homeowners on any land that falls into the newly designated special flood hazard areas. Once the redrawn maps take effect – either this fall or early next year – those rates will be available.

The savings provided by the special rates are not insignificant. The yearly premium for a homeowner under the preferred risk program is around $300, as opposed to the $1,200 – $1,500 premium they might pay otherwise, said Les Sterman, an administrator of a flood-protection district that includes three Illinois counties near St. Louis.

Sterman said that the lower premiums, “… are quite reasonable, and everyone in the area should buy insurance at those rates. It’s considerable relief to a point, obviously.” He also warned that larger companies will still have to shop the open market for their coverage, at a price he estimates to be about $30 million/year in his region.

In a statement to the press, Senator Durbin said that FEMA’s decision was “…only a temporary solution…” ensuring that homeowners “…will at least be financially protected at an affordable price in the event of a flood.” He said that the long-term solution is “… to bring the levees into a good state of repair.”

For the last six years, FEMA has been working on modernizing their maps, including digitizing levee locations in order for crisis handlers to have instant, electronic access to information about man-made hazards. In the aftermath of 2005’s Hurricane Katrina – and the resultant sharp criticism of FEMA and the Army Corps of Engineers with regard to the levees in New Orleans – the organization grew bolder, offering a lesson about getting serious in fixing the levees.

Currently, FEMA is assessing whether levees can handle a baseline 100-year flood – that’s an inundation so large that there’s only a 1 percent chance of such a flood in any given year. This scenario is FEMA’s threshold for classifying an area as “high risk.”

The agency’s effort has caused angst in many of the country’s levee-protected areas, including Sterman’s district, where there are 64 miles of post WWII levees that were built to weather a 500-year flood – one with a .02 percent likelihood of happening in any given year.

The Army Corps of Engineers, however, believes the Mississippi River defenses in Illinois require hundreds of millions of dollars in repairs and fixes in order to meet FEMA’s standards before the new maps are released and show the levees to be functionally useless, and that’s money and time the agencies in charge of levee management simply don’t have, and such a downgrade would force those homeowners in the region who have federally-backed mortgages to buy flood insurance, even if they’ve never been flooded before.

FEMA’s authority to require the insurance comes from the 42-year-old National Flood Insurance Program that Congress enacted as a result of the public’s inability to get privately backed insurance for flood losses.

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Hurricane Scale Revamped for 2010

May 14th, 2010 by Iris | Comments Off | Filed in insurance specialists

The commonly-recognized five-category rating system that describes the strength of a hurricane, and estimates the havoc its winds could cause has been updated for the 2010 storm season, which begins in the Atlantic on June 1.

The system, more properly known as the Saffir-Simpson Hurricane Wind Scale no longer includes estimates for storm surge or inland flooding due to rainfall. The scale was changed in order to ease confusion over storm surge and flooding predictions that didn’t match real-life situations, said Chris Landsea, science operations officer at the National Hurricane Center, and leader of the team that made the change.

The new scale still classifies hurricanes by their maximum sustained wind speeds beginning with Category 1 (74 mph), and ascending to Category 5 (155 mph or greater). Any storm rated at Category 3 or above is considered a major hurricane.

More importantly, the scale also tells people how strong a storm it will take in order to knock down fences, trees, power lines, or even entire buildings. The damage descriptions to homes, shopping centers and industrial buildings have been updated as well, reflecting a greater amount of coastal development.

Landsea explained, “In coastal areas of Florida, there are a lot more high-rises where the windows are susceptible to damage. That broken glass wasn’t covered at all in the old one.”

According to a report in The Insurance Journal:

In a Category 1 hurricane, shingle or metal roof coverings could peel off mobile homes, stone chimneys can topple and large tree branches will snap.
By Category 3, most mobile homes, fences and unprotected windows face certain destruction, and people should expect to go without electricity or running water for days after the storm passes.
A Category 4 storm will cause severe structural damage even to well-built homes.
Category 5 damage is catastrophic: total roof failure, blown-out windows throughout high-rises, neighborhoods isolated by fallen trees and power poles, water shortages and other widespread suffering.

In Florida and the Carolinas, however, the damage described may be less severe, because those states have the best building codes in the country, according to Landsea.

The revised Saffir-Simpson scale eliminates references to flooding, storm surge, or the amount of seawater pushed by a hurricane’s winds, and, according to Florida’s state meteorologist Amy Godsey, this simplified version of the scale also shows that forecasters have a better understanding of how storm surge works. She said the problem with the previous version of the scale was that it was extremely inconsistent with regard to storm surge.

2004’s Hurricane Charley, for example, made landfall in southwestern Florida with Category 4 winds, but brought the storm surge of a much weaker storm. 2008’s Hurricane Ike, however, made landfall just outside Galveston, Texas as a Category 2 storm, but brought a storm surge of 15 to 20 feet – a range generally associated with old-scale Category 4 or 5 storms.

Landsea said that if Ike had made landfall in Daytona Beach, Florida, its storm surge would have been only around eight feet, because the deep offshore waters of the Atlantic coast produce smaller surges than the shallower Gulf of Mexico.

Explained Landsea, “It’s like the difference between having a plate full of water and a bowl full of water. Put a fan next to them, and the water will be pushed off the plate, but the water will just swirl around in the bowl.”

Landsea says the number of variables in a storm – the size, and speed, the depth of water along the coast, and the topography of the place where it makes landfall – all combine to make the development of a separate storm surge scale impractical.

Instead, storm surge and flooding forecasts will remain in hurricane advisories and statements issued by the National Hurricane Center and local National Weather Service offices. In addition, the hurricane center is considering adding storm surge warnings to its existing list of watches and warnings. Sometimes, places outside the cone of a hurricane warning can still be vulnerable to storm surge, said Bill Read, hurricane center director. No decision on such warnings will be made for another two or three years.

The revision to the Saffir-Simpson scale took more than a year. Five wind engineers submitted updated descriptions of wind damage, and a draft was released for public comment last year, making this the first update to the scale since the removal of barometric pressure readings about ten years ago, said Landsea. Storms intensify as pressure drops, so those readings once helped forecasters assign a Saffir-Simpson category.

“Back in the ’70s it was easy to measure the pressure but difficult to measure the winds. Nowadays we have much better aircraft that fly into the winds and can measure them,” Landsea said.

Herbert Saffir, a Miami-area structural engineer, created a scale for the damage an approaching hurricane could bring, in 1969. The five-category scale was subsequently expanded to include storm surge and flooding in the early 1970s by Robert Simpson, then director of the hurricane center.

Before the Saffir-Simpson scale, hurricanes were simply described as major or minor.

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Storm Surge Warnings Might Be Added to Weather Alerts

April 2nd, 2010 by Iris | Comments Off | Filed in flood insurance

We’re still a couple of months away from the start of the Atlantic hurricane season, but that’s not too soon for the the National Hurricane Center (NHC) to be considering a new addition to their already vast collection of watches and warnings typically issued during hurricane seasons.

Specifically, NHC officials pitched the idea of a storm-surge warning to the group of first responders, meteorologists and emergency managers who attended the recent 2010 National Hurricane Conference held in Orlando, Florida, but no actual decision will be made for another two or three years.

What’s the reasoning behind a storm surge warning? It’s because there are places that aren’t necessarily inside the cones of hurricanes but are still susceptible to storm surge, and would benefit from such warnings, according to Bill Read, director of the National Hurricane Center in Miami. Read explained, “In a storm like Hurricane Ike, surges are far more dangerous than wind in a particular location. We’re thinking we need to have that warning.”

Hurricane Ike, which struck in 2008, damaged 75% of the houses in Galveston, Texas, but also submerged many acres of farmland and ranches in salt water, ruined still more acres of vegetation, and scoured away beaches.

If storm surge warnings are adopted, they will take two or three years to implement because of the technical requirements involved in incorporating surge models into pre-existing tide levels and rainfall runoff information. Two years ago, Read said the NHC was working on a program that could mate a Google application with storm surge data, so that property owners could determine the flooding threat from any category of storm.

With the debate on surge warnings comes the biggest change to the hurricane warning system in several decades: beginning in mid-may, the NHC will begin issuing storm watches and warnings roughly half a day sooner than it used to, so when a storm is approaching land, forecasters will send watches advising tropical storm conditions could be expected in 48 hours, rather than in 36, while warnings will be sent 36 hours ahead, not 24. By the middle of this decade, the NHC expects to be able to issue forecasts seven days out.

The Atlantic hurricane season begins on June 1, and despite vulnerable areas in the US, the NHC’s main concern this summer will be Haiti, where over a million people were made homeless by January’s devastating earthquake. Read says that this year, if a storm is heading in that direction, more and earlier briefings will be held, to give residents more time to prepare.

“Most people know we’ve got an impossible situation there,” Read said. “God forbid a major hurricane went across Haiti while we have this many people in a distressed state during the peak of the hurricane season.”

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Flood Insurance and Other Programs Temporarily Restored

March 5th, 2010 by admin | 1 Comment | Filed in cobra insurance, flood insurance

Earlier this week, the U.S. Senate passed legislation that included an extension for the federal flood insurance program until the 28th of March. The extension means that the NFIP (National Flood Insurance Program) can once again issue new policies, something it hasn’t been able to do since its authorization expired at midnight last Friday. The issuing of new and renewal policies has now resumed.

Brad Carroll, press secretary with FEMA, said in a statement, “This reauthorization allows for policies to continue to be issued and renewed. Individuals who were seeking to renew their policies or purchase a new policy during the brief period between February 28 and March 2, when the NFIP was not reauthorized, may now proceed with their purchase. Existing policies were not impacted by the brief lapse in Congressional authorization and continue uninterrupted.”

On February 26, the NFIP had issued a memo that included guidelines for operations during a hiatus, but the several-day hiatus that followed almost immediately did not affect any claims payouts.

Other programs reauthorized through this emergency legislation include COBRA benefits and unemployment insurance.

The National Flood Insurance Program currently covers about 5 million people.

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El Nino Dissipating, but Effects Not Gone

March 4th, 2010 by admin | Comments Off | Filed in flood insurance, homeowners insurance

Reuters is reporting today that the currently active El Nino weather anomaly, which causes abnormal warming of the water in the equatorial parts of the Pacific Ocean, is dissipating, and – in the Northern Hemisphere – it should be gone by early summer, though there is a chance it may merely weaken substantially, and linger throughout 2010.

Reuter’s information comes directly from the CPC – the federal government’s Climate Prediction Center – which is part of the United States National Oceanic Atmospheric Administration (NOAA). Their recent monthly update reported that the hallmark warm Pacific waters are slowly cooling, and that such an easing will result in “…neutral conditions” in June or July. However, the CPC also said that there are, “…everal models (which) suggest the potential of continued weak El Nino conditions through 2010, while others predict the development of La Nina conditions later in the year.”

Typically, El Nino results in chaotic global weather patterns, most notably in the Asia-Pacific region. It was first noticed by Latin American anchovy fisherman in the 19th century, who nicknamed it “Little Boy,” a reference to the Christ child, because it traditionally arrives around Christmas time. The opposite anomaly, La Nina, leads to cooler waters in the Pacific Ocean, and is often said to spark storm formation during the annual Atlantic hurricane season.

The 2009-2010 El Nino has been moderate to strong, says the CPC, with sea surface temperatures remaining warm through February, but is is also linked to the severe winter storms which have hammered the eastern United States. It was also blamed for a weak monsoon which caused severe damage to the Indian cane crop, forcing the price of sugar to a 29-year high. In addition, El Nino is believed to be connected to a severe dry spell which has hit the countries of Indonesia and the Philippines, forcing the later to increase their rice imports. The Philippines is already the world’s largest importer of the grain.

As the year progresses, the United States should expect above-average rainfall in the southwestern and south-central states, and Florida, and below-average precipitation in the Great Lakes and Pacific Northwest regions.

The “good” news – at least for residents of the Atlantic seaboard, is that if El Nino continues into June, it may hinder the formation of Atlantic hurricanes this year.

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