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Published January 23 2011

Deadline to buy flood insurance draws near

After early spring floods in the Fargo-Moorhead area the past two years and another major flood looking more and more likely, officials are urging homeowners not to wait too long this year to buy flood insurance policies.

Of the top 10 Red River crests in Fargo-Moorhead’s history, only two happened before April: the record crest of 40.84 feet on March 28, 2009, and last year’s crest of 36.95 feet on March 21.

Steve Aune, an insurance agent with Countrywide Financial in Fargo, said he’s recommending that clients have their flood insurance policies in place no later than March 15.

That means homeowners would have to buy their policies by Valentine’s Day because the National Flood Insurance Program has a 30-day waiting period after purchase before the policy takes effect.

Aune said a “very” high percentage of his clients who already have flood insurance are renewing their policies, and he’s taking calls from people who don’t have policies but are worried about the threat of a spring flood.

“I think it’s definitely in their minds,” Aune said. “Everybody is open to the fact that we’re a high-risk community, and there’s very, very few people who believe that it won’t happen.”

Statistics from the Federal Emergency Management Agency indicate Fargo-area homeowners may be heeding FEMA’s message about the importance of flood insurance.

From February 2009 to Friday, the number of policies in force in Fargo skyrocketed from 586 to 5,110 – nearly a ninefold increase. That included a 31 percent increase in the number of policies in roughly the past year.

The policy count also increased among Cass County residents outside of Fargo, from 1,282 on Jan. 1, 2010, to 1,558 as of Jan. 14, an increase of 22 percent.

Dave Kyner, flood insurance program specialist for North Dakota in FEMA’s Region VIII, called the increases “wonderful.”

“Because it shows that people are not only buying them, they’re keeping them, and that is excellent, excellent news,” he said.

Clay County had 2,079 flood insurance policies in force as of Oct. 30, up from 1,228 a year earlier. That includes 1,263 policies in Moorhead, nearly double the number in October 2009, according to data from FEMA Region V.

Officials expect the numbers to continue to climb in light of the spring flood forecast. National Weather Service forecasters said Tuesday the Red River at Fargo has a 20 to 25 percent chance of reaching or exceeding 2009’s record crest and a 50 percent chance of beating last year’s crest, which was the sixth-highest on record.

Aside from flooding concerns, some homeowners are buying policies now to ensure they will be grandfathered in at a lower premium rate if FEMA’s new flood insurance rate map pulls them into a high-risk flood zone, Aune said.

Officials at FEMA Region VIII headquarters in Denver said the agency is still working on the long-awaited insurance rate map and there’s no firm date set for its release.

Regardless of their risk category, policyholders will pay more for flood insurance this year than they did last year.

The annual premium for a preferred risk policy with the maximum $250,000 of building coverage and $100,000 of contents coverage went up by $17, to $405. Preferred risk policies are the cheapest flood insurance policies and are available to homeowners in low- to moderate-risk flood zones who haven’t had a flood claim or multiple preventative claims.

For a standard policy in low- to moderate-risk areas, the annual premium increased by $152, to $1,636.

The premium for a standard policy in high-risk areas jumped by $87, to $2,734 annually.

Homeowners who live in a high-risk flood area and have a mortgage through a federally regulated or insured lender are required to purchase a flood insurance policy.

Once the new rate map is released, homeowners who have preferred risk policies but are reclassified as living in a high-risk flood area will be eligible for a two-year preferred risk policy extension, after which time they’ll be grandfathered in at the moderate- to low-risk standard policy rate, said Norm Ashford, insurance specialist for FEMA Region VIII.

For more information, visit www.floodsmart.gov.


Readers can reach Forum reporter Mike Nowatzki at (701) 241-5528