All About Flood Insurance on the 5-Year Anniversary of Boulder County’s Catastrophic Flood

I rode my bike up to Jamestown on September 22, the first day of fall this year. The replacement pavement on the road is within a couple of hundred yards from the heart of Jamestown. As I returned on Highway 36, crossing the new bridge over Lefthand Creek, I realized that Boulder County is finally close to recovering from the epic flood of September 2013. It was five years ago that the Boulder area received as a much rain in a week as it normally does in a year. The storm’s havoc left us rebuilding from it even until now. Driving up Boulder Canyon, a sign still proclaims, “Temporary Road Open, Governor Hickenlooper”. I wonder when our permanent road will be installed? The total estimated damage from the storm was around $3 billion dollars.

It is coincidental that 2018 also marks the 50th Anniversary of the National Flood Insurance Act of 1968. The act came about because of the huge loss of life and property as Hurricane Betsy made landfall in 1965. Under the act, the National Flood Insurance Program (NFIP) was created. Since that time, the NFIP has assisted property owners, renters, and businesses recover from large flood disasters. In addition, the program has encouraged communities to adopt and enforce floodplain management regulations.

It seems as if throughout my 40-year real estate career in Boulder County, boundaries of the floodplain have often been in dispute. When new construction takes place upstream, drainage patterns can change. The Great Flood of 2013 answered many questions about where the flood waters will go. We learned a great deal from that flood and have made many improvements in anticipation of a future flood of that magnitude. You can review changes in the floodplain as a result of the 2013 flood from the Boulder County government here:

September 2013 Urban Flood Extents and 100 Year Floodplains: https://bit.ly/2xy8vtR

Floodplain Remapping Project: https://bit.ly/2xPPEK6

Be sure to contact City of Boulder and/or Boulder County for the most up-to-date information.

Since the Great Flood, what has changed relative to residential real estate and flood insurance? The amount of available insurance coverage was at $250,000 in 2013 — and it still is. During this period of time, the average price of a single-family home in Boulder has escalated to about $1 million. It doesn’t take a rocket scientist to realize good insurance coverage can be very short of the need. What happens if you have a total loss due to the flood? I’ve had clients whose homes were swept down the river during the flood.

Today, flood insurance coverage is available for up to $250,000 for residential and $100,000 for personal property within the home. If you don’t have a loan on the property, there won’t be a lender mandating the type and amount of coverage you need. It will be up to the homeowner to decide this. During the 2013 flood, many homeowners did not understand that their homeowner’s policy did not cover flooding. Many learned that damage from seepage, sewer backup, and sump pump failures were not covered under their policies. Be sure to review your policy to make sure it has the coverage you want.

Additional flood coverage is available from private companies such as Lloyds of London, but the additional coverage beyond the $250,000 can be very pricey. In many cases, the lender will only require that you have $250,000 in coverage. However, on a large property in the floodplain, the lender may require the additional coverage. Policies should be reviewed with your insurance agent to make sure you have the coverage you need and/or want. When you are buying a property in the floodplain, the lender will require you to have flood insurance in order to close the loan. Flood insurance is also available even if the property is not in the floodplain –and it is considerably less expensive than when you are. Many homeowners in 2013 who did not have homes in the floodplain wished they had had insurance coverage after the flood, and most likely now have that coverage now.

Many condos and townhomes were also affected by the 2013 flood. If a whole complex is in the floodplain, the homeowners’ association is required to have a master policy. In some complexes, like Park East Square in Boulder for example, only one corner of the complex is in the floodplain. In those cases, individual homeowners need to have their own flood insurance policy to satisfy their lender.

On a nationwide scale, Congress must periodically renew the National Flood Insurance Program (NFIP)’s authority to operate, according to the Federal Emergency Management Agency (FEMA)’s website. In July, the President signed legislation passed by Congress that extends the NFIP’s authorization to November 30, 2018. Inevitably, reauthorization is on the back burner for Congress, and home closings are delayed while waiting for Congress to take action. The REALTORS Political Action Committee always stands ready to push Congress into action each time this occurs. The National Association of REALTORS estimates that 40,000 home closings a month across the U.S. would be in jeopardy without the NFIP.

Flood insurance rates have increased dramatically across the country due to major hurricanes and disasters across the country since the 2013 flood. Even with rate increases, the NFIP only can make ends meet with the help of Congress, and it is likely that there will be changes coming to the NFIP in the future. You can stay updated at https://www.floodsmart.gov/

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