Figuring out flood insurance

Have you heard about the flood insurance debacle? What about its very real potential effect on you and your finances and on Grays Harbor’s economy?

Before we get too far lamenting what has happened and might still happen, we want to let you know, that right now help may be on the way in Congress. Many legislators – both in the Senate and in the House of Representatives – are working hard to try to find a good fix for the problem, so at least we can hope!


For a little background: You may or may not know that in your typical home insurance policy, any flood-related damage to your home is not covered. (Typically if a pipe bursts in your house or your dishwasher malfunctions, that is covered. However, if rising waters from a nearby river, lake or ocean cross your threshold, that is not covered.)

Over the years, insurance companies have either not sold flood insurance or have sold it as a separate – for some, a very expensive policy. Having a need to have homes insured for floods, the federal government has stepped in through the Federal Emergency Management Agency (FEMA) to offer flood insurance for home owners at a fairly reasonable rate.

After Hurricane Betsy hit in 1968, Congress first passed federal regulations covering flood insurance. It was other devastating storms – Superstorm Sandy and also Katrina that wreaked havoc creating heartache and more than $25 billion in damages over the last 10 years, according to FEMA.

The premiums folks were paying for FEMA flood insurance in no way could pay those deep losses.

Wanting the system to be financially solvent, in 2012 Congress passed the Biggert-Waters Flood Insurance Reform Act, which in part included that homes that were more likely to be flooded should bear more of the financial burden.

The attempt to fix this situation passed overwhelmingly in 2012 in an attempt to make FEMA’s flood insurance program financially solvent. At the time it was not widely predicted that premiums would rise so high. The reality – especially for folks in Grays Harbor and other low-lying areas, is that it turned out the “cure” was devastating.


The senate has passed a bill to reform the reforms. The House has had a bill – with 235 cosponsors including Rep. Derek Kilmer, D- Gig Harbor – called The Homeowner Flood Insurance Affordability Act. It is was similar to the Senate bill that in effect caused for a “pause” to work out the details in just how much of the financial burden folks in low-lying areas should bear, as well as the actual lines determining what is considered a flood plain.

Things can switch quickly in D.C. and now it looks like another piece of legislation will be brought to the House floor sometime next week. At this point we don’t want to get mired down in the ever-changing details of the legislative process.

However, we do think it’s important that while some additional risk should be borne by people choosing to live by a river, that in general, the financial burden should be borne by many. For heaven’s sake, we help support the folks who choose to live in tornado alley or in the path of hurricanes.

As it stands right now, with the proposed new FEMA maps drawn to include larger areas considered in the flood plain, 84 percent of Aberdeen, 95 percent of Hoquiam, 55 percent of Cosmopolis, 31 percent of Westport and 30 percent of folks in unincorporated Grays Harbor County would be considered in the flood plain. Yikes!!

That means every time someone tries to buy or sell a home, they would be affected by the high rates of flood insurance required.


Two weeks ago, Rep. Kilmer spoke on the House floor urging his fellow representatives to take action “to prevent enormous flood insurance rate hikes from going into effect for homeowners all across the country.”

Representative Kilmer said, and we agree – “This is about the basic principle of housing affordability.”

“Recently I met with realtors and homeowners, insurance agents, and mortgage brokers in my neck of the woods. And they shared with me just how dramatic the impact has already been in our region,” he told his colleagues.

“One prospective home buyer in Grays Harbor County was shocked to find that their flood insurance quote came in to a whopping $13,000 per year. After paying $600 to show that the property was elevated, the insurance quote was still more than the monthly mortgage payment would have been, and the deal fell through.”

“This policy has already led to a rapid and substantial decline in property values in a part of my district that already struggles with double digit unemployment and can’t afford another round of congressional dysfunction.”

We are grateful that Kilmer and others are looking seriously at this issue to try to find a reasonable solution.


We hope to talk with more insurance folks and real estate professionals on this issue and discuss it more next week. In the meantime, write your senators and representatives telling them to find a fair, reasonable compromise.

Dave Murnen and Pat Beaty are construction specialists at NeighborWorks® of Grays Harbor County, where Murnen is the executive director. This is a non-profit organization committed to creating safe and affordable housing for all residents of Grays Harbor County.

Do you have questions about home repair, renting, remodeling or becoming a homeowner? Call us at 533-7828, write us or visit us at 710 E. Market St. in Aberdeen


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