2020 flood insurance changes to have little impact on GF, EGF cities

March 24--As the federal government considers updating its National Flood Insurance Program, floodplain officials say it's likely residents covered by local flood protection systems won't notice a large difference.

"Everybody in the entire country is in a flood (plain)," said Grand Forks City Floodplain Manager Bev Collings. "But it's sort of like using the word 'Kleenex' instead of a 'tissue.' Everybody's in a flood plain, but it's the mandatory flood insurance flood plain, or the 100-year flood plain, that people usually refer to when they say 'I'm in the floodplain.'"

Both Grand Forks and East Grand Forks were taken out of the 100-year floodplain roughly a decade ago after finalizing their flood protection systems. The cities were placed into the 500-year floodplain, where flood insurance premiums are lower and not required. Under the current National Flood Insurance Program, premiums are based on the type of floodplain people are in. Everyone in the 100-year floodplain with a federally-backed mortgage is required to have flood insurance.

Changes for 2020 the Federal Emergency Management Agency shared on Monday, March 18, would charge people based on more factors than just their type of floodplain. It's an effort to make policyholders more aware of their flood risks. The changes will also drive up costs for many who live in high-risk areas.

The National Flood Insurance Program covers about 5 million policyholders, according to The Washington Post.

In North Dakota, State National Flood Insurance Program Coordinator Dionne Haynes says there are approximately 9,400 active policies.

"Flood (insurance) is an interesting thing, because with what the federal government brings in terms of premiums, and what they pay out in losses, they are always losing money," Haynes said.

Collings said the changes would make flood insurance more similar to car insurance.

"You get different risk for different risk levels," she said. "You know, teenage boy versus a 50-year-old man. It's totally different."

Flood insurance stands out from other insurance, Collings said, because flood insurance is a national program.

"Usually you get insurance through the federal government," Collings said. "You can get it directly from the federal government, or you can get it through your agent to the federal government. So most people just go to their homeowner's insurance and say 'I'd like to add flood.'"

Homeowner's insurance on its own doesn't cover flooding, which is whenever two properties are inundated with water.

"So if a water line in your home broke, that's not flooding. That's on your homeowner's insurance," said Collings. "If the city's water line, or a sewer backs up or something, like a storm sewer in a really large rain event, and your home and the city street gets flooded, you can make a flood insurance claim."

An increase in policyholders?

For the last several years, Collings and Haynes from the state Water Commission said they've noticed a downward trend in North Dakota policies.

"That is kind of concerning to me, because flooding is the most common and costly natural disaster," Haynes said.

Collings said that, anecdotally, she has recently noticed more city residents buying flood insurance.

"It's been fairly low for the last number of years, because we've been in a dry cycle. Now there's an increased number of people buying insurance," Collings said. "I get a lot of phone calls on it, and I also talk to a couple insurance agents, and they're saying they're writing quite a few policies."

Haynes was unable to confirm this due to a 30-day lag in the system she uses to track flood insurance policyholders.

"My system does have a 30-day lag, so I can't tell what's been happening more recently, especially with the flood threats," she said.

On Thursday, March 21, the National Weather Service reaffirmed a flood outlook it gave the region a week earlier. There's a 95 percent chance of moderate flooding and the river reaching 45.8 feet. There's still a 90 percent chance the river will crest at 47.5 feet and a 50 percent chance the river will get to 50.6 feet.

In North Dakota, 20 percent of flood insurance claims come from areas outside of the high-risk flood zone, according to 2018 data from the state Water Commission, which also noted there has been about $260 million paid out in insurance claims statewide.

Minnesota Commerce Department spokesperson Emma Bauer said a majority of Minnesotans likely don't have flood insurance, especially those outside the 100-year floodplain who are not obligated to open a policy.

"The Department of Commerce encourages Minnesotans (even those who do not live in flood-prone areas) to review their specific risks and needs to determine whether flood insurance coverage makes sense for their property," Bauer said in an email. "It is important for Minnesotans to remember that: Flood damage is not covered by a standard homeowner's insurance policy, there is a 30-day waiting period after purchasing a flood insurance policy before it takes effect and flooding can occur even outside of flood-prone areas."

'Good' rates, coverage in city limits

Collings said the city of Grand Forks still recommends its residents purchase flood insurance, even though Grand Forks has been removed from the 100-year floodplain.

"Flood insurance is still important, and as city officials we are recommending that people do get flood insurance, if they feel that they are at risk, no matter what zone you're in. Even if you're protected by the levee. And the reason for that is flood insurance covers other things, and then the rate of flood insurance is quite reasonable now, for most of the citizens that live in the city of Grand Forks."

Because Grand Forks is in a 500-year floodplain, Collings said residents have access to good, affordable coverage.

"If you're in the city of Grand Forks, you can get a policy probably average around $460 a year. And that's a really good coverage, too. It covers the building and contents."

Policyholders are required to buy flood insurance at least 30 days before filing a claim or a loss.

"You have to buy a policy for an entire year. And there is a possibility that you could use it in another part of the calendar, in July if we have a heavy rain or something like that. Flooding doesn't always have to come from the river."

Haynes said the state water commission encourages all North Dakotans to buy flood insurance, regardless of where in the state they live.

"Just because the map says they're at low risk doesn't mean flooding can't happen," she said. "Because oftentimes in North Dakota it does, as our claims have shown.

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