Snowpack Produces Run On Flood Insurance

Before the water started rising in Idaho streams this spring, insurance agencies in eastern Idaho were dealing with a deluge of another kind - requests for flood insurance.

A combination of near-record snow levels, media warnings about possible flooding and news of flood disasters in the Pacific Northwest and Midwest have caused a run on insurance, doubling and tripling sales of the policies.

“We’ve all had to kind of become flood experts in the last few months,” said Amy Smith, an agent for the Idaho Falls office of McDonald Insurance.

Her company has sold about 20 disaster policies, which include flood coverage, in the last two months - three times the usual number.

Statewide, the Federal Emergency Management Agency, which oversees one common kind of flood insurance, has seen a 22-percent increase in flood insurance policies in effect since the beginning of 1997, up to 5,341.

“That’s a pretty substantial jump,” agency spokesman Mark Wolfson said.

That does not include people who bought flood insurance from insurers other than the agency. Several local companies say most of their policies have been from a Salt Lake City company called Natural Disaster Protection Insurance.

The type of customer also has changed this year. Previously, most people buying policies did so as a condition of their mortgage, because the house was built in a flood plain.

This year, people without mortgages are knocking on the doors of insurance companies, insurance agents say. Others have homes outside designated flood plains and a long distance from any rivers.

Flood insurance is not cheap. A policy from the Utah company costs roughly $320 per year for a $100,000 house, compared to $200 for typical homeowner’s coverage, Smith said.

Federal flood insurance runs from less than $200 to over $1,000, depending on the flood risk.

Increased sales this year have yet to produce any problems with suspect insurers, said Fran Sprague of the Idaho Department of Insurance. In fact, she predicted problems are less likely at a time when insurers may actually have to pay for flood damage.

“Who wants to go into it when the barn’s about to burn?” she said.