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Taming the waters: Navigating the shifting world of flood insurance with forum organizer Angie Donaldson
Imagine you are holding a milkshake. Test its consistency by scooping up a spoonful and letting it drip back into the glass. Or, just dump it onto the floor and watch it splatter. What does it look like—a thick, blobby smear, or a watery splash on the floor and walls?
Be specific, because your decision could be the difference between a flood insurance claim that’s covered, and one that’s rejected.
Although that’s not exactly how claims are resolved, the milkshake imagery is part of flood insurance training, says Elizabeth Gildersleeve.
“Landslide, mudslide, it’s kind of in the eye of the beholder,” said Gildersleeve, who works in the Snoqualmie office of the Kevin Hauglie Agency, recalling what an instructor had said in her first training. “If it looks like a chocolate milkshake, that’s a flood and we’re going to cover it under the flood policy. If it looks like chunks of dirt in water, that’s a landslide, and we’re not going to cover it, under the flood policy.”
The Hauglie Agency staff members are refreshing their own flood insurance knowledge, and hoping to help others do the same as a series of flood insurance reforms starts taking effect Oct. 1. The Biggert-Waters Reform Act of 2012 was a discussion item at the fifth annual Snoqualmie Valley Flood Forum, held last week in Snoqualmie.
“It is overwhelmingly complex,” says Hauglie agent Angela Donaldson, “even for people like us who live and breathe it.”
Part of the reason is that the changes planned for the next five years under Biggert-Waters are not yet finalized. The law, adopted July 6, 2012, to maintain the National Flood Insurance Program, is going to change building code, lending code and, of course, the insurance program, Donaldson said. It will also affect many residents financially, since nearly every property in the Valley is in a floodplain or floodway, with some risk of flooding.
Flood insurance premiums will rise dramatically in the next few years, since one goal of the reform package was to make the program sustainable. How the rates rise will depend on when the home was built.
More recent construction, built in communities that already have a flood insurance rate map, or FIRM in place, will see an annual increase in premium of about 20 percent annually, or until the homes are actuarially rated, and they are paying for insurance for their level of risk.
Owners of insured buildings completed before the maps —1984 in Snoqualmie, 2005 in North Bend, and 1976 in King County—were in place, will lose 25 percent of a federal subsidy on their flood insurance premiums at the next renewal after Oct. 1. These “pre-FIRM homes” will continue to lose a quarter of the subsidy each of the next four years, or until the homes are actuarially rated.
That applies only to primary homes. Pre-FIRM properties that are commercial, rentals, or lived in by the owner for less than 20 percent of the year will lose the federal flood insurance subsidy entirely when they renew their policies after Oct. 1.
All pre-FIRM properties will be required to provide elevation certificates when they renew their flood insurance, too. An elevation certificate is a legal document with information on the construction, elevation and orientation of a building on a property. It can take as little as a week to get, and Donaldson said they typically cost between $500 and $2,000. However, she cautions homeowners to be sure they are dealing with an experienced surveyor for this document.
“It’s a very detailed document that only a surveyor who’s comfortable with elevation certificates should do,” she said. For the Valley, she suggests asking for recommendations or help from your community’s floodplain manager, or checking the FEMA website (www.fema.gov/media-library/assets/documents/32330?id=7408). She frequently recommends surveyor Mike Root for local work.
An elevation certificate could also mean good news, for instance in parts of North Bend, where the base flood elevation has been decreasing, Gildersleeve said. Some properties may no longer be required to have flood insurance (the insurance can be required only if a property has a federally-backed mortgage).
“For North Bend residents, they’re going to want to get those elevation certificates sooner rather than later,” she added, because they can’t cancel the insurance until the policy is due for renewal.
In other cases, the elevation certificate process could reveal some areas in which insured homeowners might be able to keep their insurance costs lower, Donaldson said. The best examples of this are adding fill and vents to under-home crawlspaces, she said. The fill helps to equalize the external floodwater pressure—three times the normal pressure for every foot that goes below the ground — on foundations and footings. The vents allow floodwaters to pass through the crawlspace unimpeded, and, she stresses, without human intervention.
There’s much more to consider, which is why Donaldson advises everyone, even people with a low risk of flooding who might be surprised by the changes, to talk to their insurance agents about flood risk.
“The one thing that we can do about it is making sure that the properties we own or live in are at the lowest risk possible,” she added. “Because at the end of the day, insurance is there to protect what you work hard for.”
Angie Donaldson and Elizabeth Gildersleeve, at the Hauglie Insurance office, help explain the changing flood insurance picture, in part through hosting flood forums.