Claims history affects few flood insured in Minot

For a small number of valley residents in Minot, the 2011 Souris River flood was more than a one-time financial hit. It also bumped up their flood insurance premiums going forward.

Multiple claims can change a property’s flood-risk classification, and in a very limited number of cases, Minot flood insurance policy holders were affected after 2011.

Tina Olson, personal lines agent with First Western Insurance, Minot, said there are residents affected, but she suspects the number is small. Only a small percentage of people had insurance in 2011, and of those, most would not have had a previous claim.

“We have seen some individuals where that has affected them, but I can probably count them on one hand,” Olson said.

Brian Hvinden, spokesman for the Federal Emergency Management Agency, said Minot’s valley is considered a non-flood plain under current mapping, despite the 2011 flood. FEMA is working on new maps, but in the meantime, homeowners typically are eligible for preferred-risk policies.

To be eligible, though, the property must meet the criteria for loss history. If a property has had two flood insurance claims or federal disaster assistance claims of more than $1,000 each or three such claims of any amount in a 10-year period, the property would no longer be eligible as preferred risk. The property would have to be insured as a standard risk.

The amount of the premium change would depend on the coverage. A homeowner who paid $460 a year for a preferred risk policy could end up paying $2,000 or more for a standard risk policy, depending on the coverage, Olson said.

Hvinden noted the standard risk premium in the non-flood plain still remains lower than a policy in a flood plain.

The risk classification is tied to the flood experience of the property and not the flood experience of the owner. So there may have been owners who filed their first claim in 2011 who could be affected by previous claims on their properties.

Olson said that the classification rules shouldn’t discourage homeowners from filing a claim if they have damages. Homeowners should visit with their agents whenever they have any flood damage, she said.

In 2011, there were 476 flood insurance policies in place in the low-risk B, C, and X zones in Minot, which are zones that would flood only based on floods larger than a 100-year event.

Only 188 people living in an “A” zone, or the 100-year flood plain, had flood insurance in place before the June 2011 flood, according to FEMA records. However, many of those policies were purchased within 30 days of the National Flood Insurance Program declaring that Minot’s flood event had started. Policies must be in place 30 days before an event.

Through the efforts of Sen. John Hoeven, R-N.D., federal legislation passed that allowed those who missed the 30-day deadline to still be eligible to file a claim. Those who held onto their policies rather than ask for premium refunds were able to file claims after the legislation took effect in July 2012.

Between 1978 and June 2014 there have been 759 flood insurance claims filed in Minot and 1,049 in all of Ward County. The National Flood Insurance Program paid out more than $57 million in Minot and $68.8 million throughout the county during that time.

In 2015, the flood insurance program will begin assessing a surcharge on all new and renewed policies to offset subsidized policies. A policy for a primary residence will have a $25 surcharge. Other policies will have a $250 surcharge.