Most R.I. Homeowners Go Without Flood Coverage

June 12, 2006

There were big gains this year in the number of Rhode Island homeowners with flood insurance, but the state still has one of the lowest rates in the country of participation in a federal flood insurance program, according to a published report.

Last year, a total of 11,869 houses in Rhode Island were protected by federal flood insurance. This year, the figure climbed to 12,542, after Hurricane Katrina swept through the Gulf Coast, The Providence Sunday Journal reported.

Still, the number represents only 3 percent of Rhode Island homes, leaving the majority without protection from water damage from storm surges, overflowing streams or backed-up storm drains.

“That to me is frightening,” Pam Pogue, the National Flood Insurance Program Manager for Rhode Island, told the newspaper.

Last week, heavy rains flooded many non-coastal neighborhoods in Providence and Warwick. Standard homeowner policies do not provide insurance protection for water damage caused by storms.

Meanwhile, with the hurricane season under way, emergency response officials are urging coastal residents to buy flood insurance before it is too late.

According to the Federal Emergency Management Agency, premiums on houses in flood zones in Rhode Island average $750 annually, while premiums on houses in non-flood zones may be a little as $112 for $250,000 in coverage.

However, more intense storms, increased risk and higher costs of damages are causing some insurance companies to discontinue or reduce homeowner coverage in coastal neighborhoods.

Insurers say nearly half the $58 billion in insured losses along the Gulf Coast resulting from last year’s hurricanes were absorbed by reinsurers, companies that insure insurance companies.

“There are a lot of policies out there now that will be canceled in the first part of August,” said Howard Thorp, president of an insurance company in Westerly, a coastal community in Rhode Island. Thorp said people will be able to find other insurance, but it will be more expensive than what they currently have.

Joseph Torti III, the state’s superintendent of insurance regulation, said this year, the state has allowed companies to cancel policies in some neighborhoods because they don’t want the insurers to leave the state altogether.

“We’re trying to balance the needs of companies with the needs of homeowners,” Torti said.

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