Friday, January 15, 2010

Kreidler: New law would help preserve flood insurance market in the Green River Valley

Washington state insurance commissioner Mike Kreidler urged state lawmakers this week to approve the creation of a joint underwriting association in the rare cases where a flood insurance market dries up, leaving businesses struggling to find coverage.

"You're going to hear that there isn't a need for this legislation because there's adequate insurance that's out there already," Kreidler told lawmakers at a recent hearing. "...I'm fully convinced, from every evidence that I have, that there is not an adequate market out there for the Green River Valley."

A weakened abutment beside the Howard Hanson Dam, in south King County's Green River Valley, has led to a 1 in 33 chance of serious flooding in the heavily developed valley below the dam, according to the Army Corps of Engineers. (The dam is not believed to be at risk of failure. The flood risk comes from the fact that the Corps may have to release more water than normal to avoid stressing the dam.)

In the wake of that news -- and earlier estimates pegged the risk as high as 1 in 3 -- the market for flood insurance appears to have tightly contracted. And according to the Corps, it could be 7 years before the dam is fully repaired.

Local lawmakers are trying to pass legislation that would allow Kreidler to set up a joint underwriting association, a group of insurers who agree to underwrite and sell flood coverage.

"We must move quickly on this bill to protect our area from an economic crisis caused by the potential threat of flooding," Rep. Tina Orwall, D-Des Moines, said in a press release this week.