Friday, April 9, 2010

The Washington flood Market Assistance Plan: Will companies step forward?

Washington state Insurance Commissioner Mike Kreidler has asked about 200 insurers to take part in a voluntary "market assistance plan" (MAP) to help businesses in the Green River Valley find adequate flood coverage. These plans work like a matchmaker, pairing companies needing flood coverage with insurers willing to sell it.

State lawmakers and Gov. Chris Gregoire recently approved legislation granting Kreidler authority to order insurers to form a "Joint Underwriting Association" and sell flood coverage in the heavily industrialized area, which is downstream from the Howard Hanson Dam, if insurance is unavailable.

At legislative hearings in Olympia in January, insurance industry lobbyists told lawmakers they much preferred the voluntary matchmaker approach:

Lewis County couple charged in $17,000 insurance fraud case

A Lewis County, Wash. couple has been charged with filing a false insurance claim for nearly $17,000 in property allegedly destroyed by rainwater leaking into a truck.

Jennifer Mau, 30, and David Eden, 47, have been charged in Lewis County Superior Court with filing a false insurance claim or proof of loss. The case was submitted to the county prosecutor by the state insurance commissioner’s office.

On Jan. 5, 2007, the couple’s home in Morton burned. The two said they stored new furniture and belongings at a storage rental facility in Centralia while the home was being rebuilt.

On March 30, 2007, Mau rented a U-Haul truck to move the items to the couple’s new home. Afterward, Mau and Eden claimed that rainwater leaked into the truck, damaging their belongings. They filed a $16,789 claim with Republic Western Insurance. They submitted store receipts for the items, which they said they discarded at a landfill.

But there were several problems with the claim:

• U-haul subsequently conducted water tests on the truck and determined that it did not leak.

• Weather reports for that date indicate little or no precipitation.

• And the weight of the items Mau claimed to have taken to the landfill would have significantly exceeded the weight dumped at the landfill, according to the landfill receipts they submitted.

After investigating the claim, Republic Western denied it. Insurance Commissioner Mike Kreidler’s Special Investigations Unit also investigated and took the case to the Lewis County prosecutor.