Colorado

Feb 26, 2014 11:34 PM by Maddie Garrett

Flood insurance hikes more daunting than flooding for businesses

With the devastation of flash flooding still fresh in the minds of many businesses and homeowners, people are looking at flood insurance. But getting it is proving to be more daunting than the flooding itself.

Rates are expected to go up with a new bill being proposed in Congress, but by how much is still up in the air. Flood insurance rates must go up because the national flood insurance program had to make some big payouts last year, after devastating floods that hit Colorado and from Hurricane Sandy.

While many business owners said they understand that, they simply can't get over the sticker shock of the quotes they're getting this year and they're having to make some tough decisions because of it.

"I got flooded twice, and lost lots of merchandise and I was hoping to get some flood insurance," said Faruk Sahin, owner of Mavi Turkish Arts on Manitou Avenue.

Last year, flood insurance would have likely cost Sahin about $5,000. But that price is long gone.

"Deductible is like $20,000 if you pay upfront, and like $20,000, $30,000 a year," said Sahin of the quotes he got.

Kevin Legrande is opening up a new brewery across the street, Manitou Brewing Company. He too was thinking about flood insurance and found lower prices around $9,000, but that price came with a $50,000.

"As you get down to a reasonable deductible, it's more like $15,000, $16,000," said Legrande.

Those prices are bad news for businesses.

"I don't think anybody can afford that around here," said Sahin.

Because many small business owners can't afford it, they're moving out of the flood zone or making other tough decisions.

"I'm pretty sure it's making people not get flood insurance, they're taking the risk," said Legrande.

Sand bags still line the walls of many businesses along Fountain Creek, as those who have a choice are opting out of flood insurance. Sahin said he's not getting it and taking matters into his own hands.

"I'm not using anything in the basement," he explained. "Metal sheets and cover up all the back doors that we don't have to use."

Sahin's building is paid off, so they aren't required to have flood insurance. But other buildings being financed must have it. That means stores could see much higher rents, and Sahin believes it's causing some to close their doors or move to other areas of town.

That's where El Paso County Commissioner Sallie Clark is stepping in. She left for Washington D.C. Thursday to work with the National Association of Counties. Among several issues they're tackling, flood insurance is a big one. Clark is working on a bill that will hopefully keep rates from drastically spiking.

"What they're looking at is a more gradual, grand-fathering in, but still gradually raises rates a little bit," said Clark.

The bill Clark is working on also temporarily freezes rates for homeowners while FEMA works on new flood maps. But homeowner rates will go up too.

Clark said if you think you need flood insurance, get it now and don't let your policy lapse because waiting could cost you even more.

 

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