Private Insurers Avoiding Washington Area Army Corps Says Will Flood Soon

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Insurance brokers say private insurers won’t sell flood insurance in Kent, Renton, Auburn and Tukwila where the Corps of Engineers says Green River flooding is likely this winter.

Federal insurance is still available but capped at $500,000 for a structure and $500,000 for contents. That won’t cover many businesses in the valley.

The number of flood insurance policies in the Green River Valley rose from 118 in the first half of last year to more than 1,000 in the first half of this year.

The corps says the Howard Hanson Dam may be unable to hold back a heavy winter rain.

Seattle broker Sam Alexander said Lloyd’s of London has inquired. “It was a relatively unprecedented situation,” Alexander said. “Insurance is about the risk of unforeseen events. But here was the Corps announcing that it pretty much intended to flood the valley.”

As publicity increased, underwriters backed away, and what policies remained had exclusions for actions taken by governments. Because flooding technically would be decided by the Army Corps, insurers canceled policies and returned premiums.

Manufacturers with equipment are especially vulnerable.

“For somebody like me, it means if there’s a bad flood, I’m out of business,” said Eric Scheider, president of Synergy Machine, which builds parts for aerospace and medical industries. “The only insurance I can get is federal insurance, which covers a half-million dollars, which is fine, except that I have $1.5 million just in equipment”

Greg Larkin owns giant milling machines that cost about $750,000. His best insurance, Larkin said, “is finding a way to keep the water out.”

John Graves, manager of the federal program in the region, said rates vary but the average national cost is about $650 a year.