State legislators Keiser, Orwall, vow to lead flood insurance fight

The threat of flooding may have dropped throughout the Green River Valley, but the risk, though diminished, still remains and South Sound legislators are leading a charge to create a “Joint Underwriting Association” to guarantee local businesses can get insurance.

“It’s very important,” said Sen. Karen Keiser (D-Kent), who is sponsoring the bill in the state senate.

The JUA would act as a government-organized non-profit insurance that could force insurance companies to provide insurance for businesses in the flood zone, though a limit of five years – the length of the expected threat from flooding – would be placed on the legislation.

Both Keiser and Rep. Tina Orwall (D-Kent), who is sponsoring the legislation in the state House of Representatives, were on hand Jan. 6 to talk about the JUA legislation at the Kent Chamber of Commerce’s first membership luncheon of the year.

Orwall said she knew of the flood threats, but had the true effect of what a flood could do to the region brought home to her during a helicopter flight of the river and Howard Hanson Dam, which protects the valley from the flooding that used to occur nearly every winter, prior to dam construction.

The dam controls the amount of water rushing through the river valley and has allowed the area to become what Keiser characterized as an “economic engine” for the whole state.

“This is a central hub, especially when it comes to manufacturing jobs,” Orwall said.

The representatives said they have heard from many businesses in the valley about the difficulty in getting flood insurance or the high cost of premiums and the relatively low limits of flood insurance offered through the Federal Emergency Management Agency.

Though FEMA covers up to $500,000 for the building and an additional $500,000 for equipment, that amount does not begin to cover the expenses for some businesses, which have millions of dollars of manufacturing equipment located in the Valley.

Mayor Suzette Cooke, who supports the legislation, said during the luncheon that it was needed in part because premiums for businesses located in the valley have gone through the roof because of the threat of floods.

Cooke told of one business that last year was quoted a price of $25,000 to cover 18 buildings, but this year saw the cost jump to $50,000 per building.

The FEMA insurance also does not cover business-interruption insurance, which can be critical to keeping a business going during a flood.

“The flood insurance now available does not cover business interruption,” Keiser said.

Orwall said the legislation, which is also supported by Washington Insurance Commissioner Mike Kreidler, would require any company that provides insurance to come to the table and band together to provide financing for insurance for any busy that wants to pay for it.

But Orwall reiterated the insurance would not be free and the businesses would still have to pay for it.

“This is still going to cost businesses,” she said. “But it does stabilize the market.”

Orwall and Keiser both plan on conducting hearings on the bill in the first week of the legislative session, which begins Jan. 11, and asked business who support the idea to come speak in front of the Legislature because of expected opposition from the insurance industry, which Orwall said claimed the market was responding to the problem.

If passed, the JUA could be in place by next winter, in time for another round of potential flooding.

“It’s still a long-term problem,” Orwall said.

Both Keiser and Orwall said they were optimistic about passage of the bill this session.

For more information on the Joint Underwriting Association bill, visit http://apps.leg.wa.gov/billinfo/default.aspx and search for either House bill 2560 or Senate bill 6240.