Washington Commissioner Warns Insurers on Flood Claims

The Washington State Insurance Commissioner has issued a warning to property insurers with policies in the Green River Valley not to categorically deny flood claims.

The Howard Hanson Dam, above the valley, has been found to have structural weaknesses that could force the Army Corps of Engineers to release more water than usual if there are heavy rains. Such a release could cause flooding in places downstream, such as Auburn and Kent.

Standard property policies often contain language excluding losses or damage due to government actions.

“I strongly urge all companies to refrain from taking such a position,” Commissioner Mike Kreidler said in a letter sent to about 200 commercial insurers.

The language of such policies “doesn’t apply,” he added.

“I do not believe that a government order to release water to protect the dam constitutes the type of ‘destruction of property by order of governmental authority'” included in many insurers’ commercial flood policies, Kreidler said.

The main cause of such flooding would be heavy rainfall, he said. The release would be a consequence. Moreover, the release cannot be qualified as “seizure or destruction” of particular property.

Some companies use different policy language. Kreidler is asking those companies to contact his office to discuss the policy language and how it would be applied to this situation.

He’s also asking all companies to reassure customers about their coverage.

“People buy insurance to protect their families and businesses from exactly this kind of risk,” said Kreidler. “The people who live and work there need to know that their insurance companies stand behind them.”