Do Coloradoans Need Flood Insurance?

By August 2, 2012Insurance Issues

By Matthew B. Drexler
Partner and Attorney
The Gasper Law Group, PLLC

Short answer: “YES”.

Homeowner, business and renter policies routinely exclude losses due to flooding or groundwater run off. This could be a significant problem for neighborhoods affected by the wildfires, or otherwise prone to flash flooding.
Intense heat causes the soil to develop a water resistant coating or layer. These are called “hydrophobic soils.” Coarse soils, like decomposed granite, are particularly prone to becoming hydrophobic. The area affected by the Waldo Canyon Fire west of Colorado Springs includes soils made up of decomposed granite; that is, Pikes Peak granite.

So, if you are downhill from the burn area flash flooding may be a problem. The city of Manitou Springs is already considering installing concrete barriers along Fountain Creek, and to reinforce drainage ditches. As the fire becomes more contained federal officials are studying how best to mitigate erosion and run off problems above the Mountain Shadows and Cedar Heights areas.

Flood insurance is only available through a federal law, the National Flood Insurance Program. Private insurers do not offer this coverage. Congress passed the statute after hurricane Betsy hit New Orleans in 1968. The insurance is administered by the Federal Emergency Management Agency (FEMA). Right now there is a 30 day waiting period once one applies for this coverage, and pays the premium. That may not help around here. The monsoon season, with periodic afternoon storms, begins in July.
There are bills in both houses of congress aimed at solving this local problem. Both Colorado Senators, Mark Udall and Michael Bennet, are co-sponsors along with several others form western states. If the law passes, the 30 day waiting period would be waived for property “subject to elevated risk of flood due to wildfire on federal land.” Senate Bill 3320, 112th Congress. The property owner must purchase the insurance promptly after the fire containment date. We do not know how pending policy applications will be handled. And we do not know whether the law will pass – it is in committee now.

Regardless, if you own property that might be at increased risk due to the wildfires, or that is otherwise in a flood prone area, consider acquiring flood insurance.

UPDATE: The law passed.