Monday, June 28, 2010

State & insurers launch new program to help Washington businesses below Howard Hanson Dam find flood coverage

Washington state Insurance Commissioner Mike Kreidler and more than two dozen insurance companies have launched a new program to help Green River Valley businesses struggling to find flood coverage.

The “Washington Flood Market Assistance Plan” will act as a matchmaker, pairing businesses needing coverage with insurers selling it. The Surplus Line Association of Washington has agreed to act as administrator of the plan.

Last year, concerns about potential flooding below the Howard Hanson Dam made it difficult for some area businesses to find adequate coverage. Kreidler worked with state lawmakers and Gov. Chris Gregoire to get the law changed to allow this program.

“The Green River Valley is a key part of the state’s economy,” Kreidler said in a news release. “Companies must be able to find adequate coverage, both for flood damage and for business interruptions due to flooding.”

To date, 26 companies have volunteered to take part in the program, at Kreidler’s request. Businesses seeking coverage must apply through an agent or broker. For more information on the program, including a list of frequently-asked-questions (or, at this point, at least what we imagine will be asked), please see our Washington Flood Market Assistance Plan page.

If the voluntary program isn’t effective, the legislation also gives the insurance commissioner the power to compel companies to form a “joint underwriting association.” The joint underwriting association would act as an insurer of last resort.

“It remains my goal to resolve this on a voluntary basis if possible,” said Kreidler.

He’s also urging anyone in the potential flood areas – including homeowners and renters -- to strongly consider purchasing coverage from the National Flood Insurance Program.

For businesses, however, federal flood coverage is limited to $500,000 per building and $500,000 for contents. Also, the program doesn’t provide business-interruption coverage.