Colorado Flooding – Six Months Later

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Release date:
March 7, 2014
Release Number:

DENVER – In the past six months, more than $284 million in federal funds has been provided to Coloradans as they recover from last September’s devastating floods.

More than $222 million has come in the form of disaster grants to individuals and families, flood insurance payments and low-interest loans to renters, homeowners and businesses. More than $62 million has been obligated to state and local governments’ response and recovery work.

At the same time, long-term recovery efforts are underway, staffed and funded by federal, state and local governments, and by volunteer agencies dedicated to helping those most in need.

The $284.9 million breaks down this way: (All figures are as of COB March 3, 2014.)

$60,418,419 in FEMA grants to more than 16,000 individuals and families for emergency home repairs, repair or replacement of essential personal property, rental assistance, and help with medical, dental, legal and other disaster-related expenses;
$98,750,000 in U.S. Small Business Administration low-interest disaster loans to more than 2,440 homeowners, renters and businesses;
$63,641,332 in National Flood Insurance Program payments on 2,071 claims, and
$62,055,973 in FEMA Public Assistance reimbursements to state and local governments for emergency response efforts, debris cleanup, repairs or rebuilding of roads, bridges and other infrastructure, and restoration of critical services.

“The flooding disrupted the lives of thousands, changed the course of streams, isolated mountain communities, and left major roadways impassable in many places,” said Tom McCool, federal coordinating officer for the disaster. “More than 1,200 men and women from FEMA were mobilized from all over the country to this disaster. We’re proud to be part of the team as Coloradans recover, rebuild and renew their lives.”

Over a five-day period last September, historic rainfall swept through the Front Range, with some areas receiving more than 17 inches of rain. The flooding killed 10 people, forced more than 18,000 from their homes and destroyed 1,882 structures, damaging at least 16,000 others. Some of the hardest hit communities included Jamestown, Lyons, Longmont, Glen Haven, Estes Park and Evans.

At the request of Gov. John Hickenlooper, President Obama signed a major disaster declaration for Colorado on Sept. 14, 2013.

The 11 counties designated for Individual Assistance under the major disaster declaration are Adams, Arapahoe, Boulder, Clear Creek, El Paso, Fremont, Jefferson, Larimer, Logan, Morgan and Weld.

The 18 counties designated for Public Assistance are Adams, Arapahoe, Boulder, Clear Creek, Crowley, Denver, El Paso, Fremont, Gilpin, Jefferson, Lake, Larimer, Lincoln, Logan, Morgan, Sedgwick, Washington and Weld.

Other federal recovery activities and programs include:

Hazard Mitigation

Approximately 50 percent of Public Assistance permanent repair work and nearly 65 percent of large (more than $67,500) Public Assistance projects contain mitigation measures to lessen the impact of similar disasters on publicly owned infrastructure. These mitigation measures have been approved for 123 projects with a cost of $3,439,200.
FEMA hazard mitigation specialists have provided county and local officials with technical assistance and reviews of existing flood control measures and challenges, helping revise hazard mitigation plans, and providing advice and counsel on numerous mitigation and flood insurance issues.
FEMA flood insurance inspectors assisted county officials to assess substantial damage at identified sites.
National Flood Insurance Program specialists as well as the state NFIP coordinator and state mapping coordinator met with the City of Evans to discuss floodplain management and the city’s recent adoption of the Weld County preliminary maps. The State and FEMA will continue to work with city officials by providing additional training and technical assistance to support their floodplain management program.

Disaster Case Management Program

FEMA has awarded a Disaster Case Management Grant of $2,667,963 to the State of Colorado. Under this state-administered program, case managers will meet one-on-one with survivors to assess unmet disaster-related needs that have not been covered by other resources.

Disaster Unemployment Assistance

$302,795 has been dispersed to 151 applicants in this federally funded, state-administered program.

Crisis Counseling Grant Program

Colorado Spirit crisis counselors have talked directly with 18,178 people and provided referrals and other helpful information to more than 88,000. Counselors met with nearly 1,200 individuals or families in their homes. The counselors are continuing door-to-door services and community outreach counseling programs. In mid-March, the longer-term Crisis Counseling Regular Services Program grant will be awarded to the State to continue the program.
The grant will provide an additional nine months of crisis counseling outreach services to survivors.

Voluntary Agencies

At the height of the disaster there were 53 agencies that ultimately provided a total of 275,784 volunteer hours. Survivors received shelter, food, water, snacks, muck-out, and debris removal.
Long Term Recovery Groups have been established in Larimer, Weld and Boulder counties, and Longmont and Lyons.
El Paso and Fremont counties are offering case management through El Paso County Voluntary Organizations Active in Disasters.

Disaster Legal Services Program

Through the Colorado Bar Association/American Bar Association program, 284 State Bar-Licensed volunteer attorneys assisted 619 survivors with disaster-related legal issues. The program completed operations at the end of February.

Federal Disaster Recovery Coordination

The Federal Disaster Recovery Coordination group has brought together federal and state subject-matter experts to advise local and state decision-makers on the best methods to achieve an effective recovery. The FDRC focuses on how best to restore, redevelop and revitalize the health, social, economic, natural and environmental fabric of the community.
The group’s recently released Mission Scoping Assessment lists recovery-related impacts and the breadth of support needed, as well as evaluates gaps between recovery needs and capabilities. Its soon-to-be-released Recovery Support Strategies document outlines state recovery priorities and discusses how federal agencies can support those efforts.
The State of Colorado, FDRC and other federal agencies are:
assisting Lyons and Jamestown with long-term community planning and recovery organization;
facilitating a survey to gauge impacts of flooding on business communities;
helping identify housing options for disaster survivors, and
helping local governments identify stream channel choke points so local communities can prioritize limited hazard reduction in streams.

Social Media

By clicking the “like” button on the COEmergency Facebook page, Coloradans can get detailed posts with useful information and photos. The Colorado Division of Homeland Security and Emergency Management’s (DHSEM) Twitter account COEmergency has more than 23,000 followers and offers disaster recovery information, links to news products and other information that disaster survivors may still find useful.
More than 1,000 tweets have provided response and recovery information. Since the September floods began, more than 1,200 new participants have started following FEMA Region 8.

Last Updated:
March 7, 2014 – 15:29
State/Tribal Government or Region:
Related Disaster:
Colorado Severe Storms, Flooding, Landslides, and Mudslides

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Cell Phone, Other Distractions Greater Threat to Teen Drivers

Teens may begin their driving habits with great caution but as months behind the wheel pass, they begin to multitask at higher frequency rates – dialing cell phones, eating, and talking to passengers – and therefore greatly raise their risk of crashes and/or near-crash incidents.

These findings from a study conducted by the Virginia Tech Transportation Institute and the National Institutes of Child Health and Human Development appear in the Jan. 2 issue of the New England Journal of Medicine.

“Novice drivers are more likely to engage in high-risk secondary tasks more frequently over time as they became more comfortable with driving,” said Charlie Klauer, group leader for teen risk and injury prevention at the transportation institute’s Center for Vulnerable Road User Safety and first author of the article. “The increasingly high rates of secondary task engagement among newly licensed novice drivers in our study are worrisome as this appears to be an important contributing factor to crashes or near-crashes.”

Traffic studies site that drivers from 15 years to 20 years of age represent 6.4 percent of all motorists on the road, but account for 11.4 percent of fatalities and 14 percent of police-reported crashes resulting in injuries.

Interaction with cell phones and other handheld electronic devices have garnered the most public and media interest, but even the simplest distractions can put a young driver at risk.

In the New England Journal of Medicine study, titled “Distracted Driving and Risk of Crashes Among Novice and Experienced Drivers,” Klauer and her research team found that likely dangerous distractions for new drivers – versus experienced motorists – include handling of a cell phone to dial or text, reaching away from the steering wheel, looking at something alongside the road, and eating.. All these acts were statistically significant as a distraction for the new drivers.

“Any secondary task that takes the novice driver’s eyes off the road increases risk,” said Klauer. “A distracted driver is unable to recognize and respond to road hazards, such as the abrupt slowing of a lead vehicle or the sudden entrance of a vehicle, pedestrian, or object onto the forward roadway.”

Klauer and her team compared the results of a one-year, 100-car study with drivers between 18 and 72 years of age with an average of 20 years’ experience and an 18-month study of 42 teens who had drivers’ licenses for less than three weeks when the study began.

Participants from both studies drove vehicles outfitted with the same data acquisition systems developed at the Virginia Tech Transportation Institute, including a minimum of four cameras and a suite of sensors which collected continuous video and driving performance data for the duration of both studies.

Data coders at the institute then watched the video recordings of the drivers and noted any presence of distracting secondary tasks before or during an instance of a crash or near-crash. Many participants from both studies were involved in multiple crash/near-crash events, said Klauer.

A secondary task was considered a contributing factor to any crash or near-crash event if it occurred within five seconds prior to or within one second after the event. A crash was defined as any physical contact between the study participant’s vehicle and another object, where the driver was at fault. A near-crash included any maneuver that required the driver to quickly maneuver the vehicle to avoid a crash.

The data revealed that compared to experienced drivers, novice drivers engaged in secondary tasks less frequently during the first six months. However, they matched experienced drivers between months seven and 15, and were engaged in non-driving tasks more often than experienced drivers during months 16 through 18 – a two-fold increase in risky distractions during the last three months of the study.

“Many states have adopted graduated driver licensing provisions that limit cell phone use,” said Tom Dingus, director of the Virginia Tech Transportation Institute and a co-author on the New England Journal of Medicine paper. “However, it is not the only risky behavior for novices. Our analyses separated talking and dialing tasks and found that talking on a phone did not increase crash risk among experienced or novice drivers, while dialing increased risk for both groups.”

Combining crashes and near-crashes in odds ratio calculations produces conservative point estimates with tighter confidence intervals than when using crashes alone, said Feng Guo, an assistant professor of statistics affiliated with the Virginia Tech Transportation Institute and a co-author of the study.

“The true risk is probably higher than indicated,” added Guo.

Added Klauer, “Newly licensed novice drivers are of course at a particularly high crash risk, in part because driving is a complicated task and novices tend to make more mistakes when learning a new task.”

“In previous studies we found that crash or near-crash rates among the novice drivers were nearly four times higher than for experienced drivers,” she said. “Therefore, it should not be surprising that secondary task engagement contributes to this heightened risk among novice drivers.”

Additional authors include Bruce G. Simons-Morton, a senior investigator with the National Institutes of Child Health and Human Development, which sponsored the research; Marie Claude Ouimet, an assistant professor at the University of Sherbrook in Montreal; and Suzie E. Lee, a research scientist at the Virginia Tech Transportation Institute.

Added Simons-Morton of the National Institute of Child Health, “This study is first report of its kind to objectively assess the degree to which engagement in tasks other than driving contributes to novice drivers’ crashes and near-crashes, and to compare the results to the impact of such distractions on more veteran drivers.”

Source: Virginia Tech Transportation Institute

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State hurries to update maps; many damaged homes not in floodplain – The Denver Post

State hurries to update maps; many damaged homes not in floodplain – The Denver Post.

More than 17 percent of homes destroyed or damaged in four of the counties hardest-hit by September’s flood — Weld, Larimer, Boulder and Logan — were not in the floodplain, according to a Denver Post analysis.

The epic floodwaters not only tossed homes into rivers and doused entire neighborhoods in mud, but exposed flood-management plans that were out of date. Some had not been changed in more than 30 years.

Now, as many families struggle to repair their homes, they are tangled up in what is Colorado’s biggest scramble in decades to update flood-hazard maps. Homes that existed for generations — long before floodplain maps were drafted — were swept away from plots of land that may soon be deemed too dangerous for construction.

Larimer County is preparing to tell more than 70 homeowners who built before floodplain maps existed that they cannot rebuild in the floodway, the most hazardous section of the floodplain.

And at Evergreen Mobile Home Park in Milliken, in Weld County, almost no one had flood insurance, a misfortune that had only begun to sink in as water gushed over the highway into the homes and yards of 33 families and 100 children that September night. The trailer park is not in the floodplain, although the edge of the flood-hazard zone isn’t far: about 500 feet from the park and concealed by an 8-foot wooden fence off Milliken’s main street.

After the maps are updated, the park could end up being part of the flood zone, and residents would probably have to buy flood insurance and perhaps be forced to move. The town hasn’t updated its floodplain map since 1979.

Town and county planners across Colorado are questioning how to handle letting people move back into homes that flood managers might later determine are unsafe.

Celerina Luciano holds her daughter at Evergreen Mobile Home Park in Milliken. <!--IPTC: MILLIKEN, CO - DECEMBER 18: Celerina Luciano holds her daughter at

Celerina Luciano holds her daughter at Evergreen Mobile Home Park in Milliken. (AAron Ontiveroz, The Denver Post)

“Communities are absolutely clamoring to get information as fast as possible so life can go on and planning decisions can be made,” said Kevin Houck, chief of watershed and flood protection for the Colorado Water Conservation Board, the state agency that maps the floodplain. “This has been by far the biggest push to update them that I’ve seen in at least my 10 years here.”

State or federal law does not prohibit people from building in a floodplain or even a floodway; communities are allowed to make their own rules regarding whether residents can live in hazard zones. Typically, people are not allowed to build in a floodway, where the deepest floodwater is predicted, but can live on the fringes of the floodplain.

State flood-management officials plan to have — within about a month — revised, preliminary floodplain maps for counties that were flooded, Houck said. The first task is creating topography maps that include changes in the direction of rivers since fall.

Nothing but car keys

Most people were in their pajamas when the water poured into Evergreen Mobile Home Park, sloshing mud into living rooms, sweeping kids’ bicycles to neighbors’ yards and sending residents fleeing with nothing but their car keys.

Of the 33 homes in the park, just two were insured for rising waters.

Volunteers help Jose Moreno clear out his destroyed home at the Evergreen Mobile Home Park. <!--IPTC: MILLIKEN, CO - DECEMBER 18: Volunteers help Jose

Volunteers help Jose Moreno clear out his destroyed home at the Evergreen Mobile Home Park. (AAron Ontiveroz, The Denver Post)

Milliken is warning residents of the park that if they move back in, it’s at their own risk. In order to get building permits to fix their homes or install new ones, residents must sign a city affidavit that says they understand that after the town completes engineering studies, the property might end up in a flood-hazard zone.

“In such instance, I may be required to relocate my mobile home in the future at my own cost,” it says. “I understand that this relocation might be outside Milliken.”

Park residents say they had no choice — other than homelessness — but to sign the document.

“We were trapped — you either sign it or you don’t get your house back,” said park resident Martha Gutierrez.

Gutierrez and others said it seems the city is using the flood as an excuse to get rid of them by forcing the mobile-home park out of the historic, agricultural town.

Milliken officials, however, said they did not pressure anyone to sign the affidavit. They required it because it seemed only fair to warn residents before they move back in that the area could become a flood-danger zone, said town clerk Cheryl Powell.

“We definitely don’t want to lose the residents from there,” she said. “They went through a very difficult time.”

Residents of the mobile-home park were particularly offended that the affidavit says they might have to leave Milliken, where many of them have lived most of their lives.

Several of the park residents work at nearby dairies or factories, including Eastman Kodak in Windsor, or drive trucks for oil and gas companies. On a recent December day, many stood in line along Broad Street in Milliken to pick up food-bank boxes loaded with peanut butter and soup.

“This is our home,” said Gutierrez, recalling how residents watch neighbors’ kids or give each other rides to work. “We all help each other. That’s what we did best.”

Just 13 of the 33 families have signed the city’s affidavit and moved back to the park. Several are still doubled up in houses with friends or family; two live in fifth-wheel campers. Celerina Luciano recently returned after spending three months in a house with 14 people.

At the park, crews are ripping apart homes destroyed by the flood, reducing them to piles of wood and metal. Many families received federal assistance through the Federal Emergency Management Agency, but they said the money — typically about $4,000 — covered only building supplies or helped with a down payment on a new mobile home. Volunteers have repaired many of the homes for free.

State flood-protection chief Houck said he has seen the scenario play out over and over. When flood maps are updated and an area becomes part of the floodplain, residents point fingers at community planners and claim they should have been told beforehand.

“You can write a script to this whole thing,” he said.

Milliken is trying to help mobile-home park residents by giving them advance warning, said Anne Johnson, the town’s economic development director. The town is applying for funds to begin updating its floodplain maps right away; waiting on FEMA could take three to five years.

“We just wanted to be transparent and let them know that we care and we want them to know,” Johnson said. “We don’t know if it’s going to be in the floodplain at all.”

A separate coverage

State law does not mandate that Coloradans who live in a floodplain buy flood insurance, which is separate from homeowner’s coverage.

But lenders often require it when homebuyers finance a house. That means the people most likely to have flood insurance are those who have not paid off their mortgages.

The average annual cost for properties in high-risk areas is $600 per year, said Carole Walker, executive director of the Rocky Mountain Insurance Information Association. If it’s not required, “most people that live in a lower-risk area weigh the cost versus the risk and don’t buy it,” she said.

Typical homeowner’s insurance will cover burst pipes that flood a basement, rain or hail pounding through the roof or a disconnect of the washing-machine hose. But flooding because of rising waters is covered by separate insurance purchased through a federal pool administered by FEMA.

In Larimer County, about 100 of the most damaged homes were in the floodplain. Among them are 77 in the most dangerous part of the floodplain — the floodway.

“The county will tell them they cannot rebuild in the floodway,” said county information manager Deni LaRue. “There is an appeals process where they can challenge the findings, so it’s a very dynamic situation.”

Among the flood-damaged properties already assessed by inspectors in Larimer County, 143 are in the floodplain and 33 are not.

“We are hoping FEMA will step in and remap the whole floodplain,” said Eric Tracy of the Larimer County engineering department. While the county waits three to five years for the federal agency’s maps, officials are expecting a rough-cut version from the state that will help community planners in the meantime.

In Milliken, mobile-home park owners Tim and Jerrie Solomon are working to save the park. Tim has taken just two days off out of 90 from moving mud and hauling building supplies, and one of them because he got a concussion while helping with repairs.

The park has been there for 47 years, and Laura Medina has lived there for 23. The night the water came, her neighbors pounded on her door and helped get her kids out.

“It’s all my life living here,” she said. “I want to be here another 20 years.”

Jennifer Brown: 303-954-1593, or


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HUD brings $62.8 million to bear on Colorado flood recovery – The Denver Post

LYONS — The federal government will make available $62.8 million in disaster-recovery funds to communities in northeastern Colorado devastated by September’s floods.

Housing and Urban Development Secretary Shaun Donovan, Gov. John Hickenlooper and Sens. Mark Udall and Michael Bennet announced the funding through the Community Development Block Grant Disaster Recovery program at a midday press conference at Lyons Town Hall after the four toured flood damage in the area.

A building dating to the 1800s lies destroyed by floodwaters in Meadow Park in Lyons on Sept. 18, 2013. (Craig F. Walker, The Denver Post file)

“It’s a huge win for Colorado,” Udall spokesman Mike Saccone said. ” It’s what they’ve (the Colorado senators) have been pushing for since September.”

The floods killed nine people, forced 18,000 from their homes and damaged or destroyed thousands of residences and hundreds of businesses.

FEMA and other federal agencies have provided relief, but not enough for many in the hardest-hit areas, such as Lyons, where rebuilding is just beginning and resources are scant.

In Lyons, where tributaries of St. Vrain Creek come together, floodwaters ravaged two mobile home parks and older residential areas in the heart of town, as well as destroying the small town’s core utilities and infrastructure.

CDBG funds can be used for housing repairs and replacement, economic development, infrastructure and flood protection. Based on current disaster data, 80 percent of the money must be spent in Boulder, Weld and Larimer counties. More money may be awarded in 2014 as damage data becomes available, HUD said in a news release.

Bennet, who with other members of Colorado’s delegation began lobbying for the grant in September, said in a news release that “the funding is critical for a number of small Colorado towns overwhelmed by this disaster to help finance rebuilding costs.”

Much of Lyons, especially the south side, was still devasted on Oct. 26, 2013. (Kathryn Scott Osler, The Denver Post file)

The grants are also made according to a formula that considers recovery needs unmet by other federal assistance programs.

After FEMA and the state pay their part, Lyons, for example, faces at least $6.5 million in rebuilding costs, about $2 million more than the town has in its reserves.

The Colorado delegation previously had worked to raise a $50 million cap on federal funds for repair of highways, roads and bridges to $450 million, Saccone said.

The CDBG gant was the next big step toward recovery, he said.

The HUD grants are flexible in their uses to help cities, counties and states rebuild after presidentially declared disasters. The grants are preferentially given to low-income areas, the HUD website says.

Electa Draper: 303-954-1276, or

via HUD brings $62.8 million to bear on Colorado flood recovery – The Denver Post.

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Permanent flood fixes in Colorado could take years – The Denver Post

Permanent flood fixes in Colorado could take years – The Denver Post.

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November Home Maintenance Tip: Give your oven a… – Gudka Insurance Agency – Independent Insurance Agent

November Home Maintenance Tip: Give your oven a good cleaning before the cooking marathon begins on Thursday. Remember to keep the area well ventilated if running the self cleaning feature!

via November Home Maintenance Tip: Give your oven a… – Gudka Insurance Agency – Independent Insurance Agent.

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Prospects Dim for Bills to Delay Flood Insurance Rate Hikes

Prospects Dim for Bills to Delay Flood Insurance Rate Hikes.

Efforts to delay implementation of changes in the federal flood insurance program have run into roadblocks on both sides of Capitol Hill.

The leaders of the House Financial Services Committee say they are standing behind last year’s bipartisan legislation to put the flood insurance program on sounder financial footing even as the implementation of the law has sparked a chorus of complaints from constituents fearing spikes in premiums and plummeting home values.

In the Senate, attempts to call a quick floor vote on legislation to delay the changes in the program — designed to force higher premiums on properties especially at risk of flooding — appear to face opposition from both Democrats and Republicans.

Sen. Mary Landrieu, D-La., wants to add the measure to an unrelated defense policy bill, but Majority Leader Harry Reid, D-Nev., is restricting the ability of senators to offer unrelated amendments. Meanwhile, Republicans are unlikely to allow a vote that could give Landrieu, who faces a tough re-election bid next year, the chance to claim political credit.

The curbs on taxpayer-subsidized flood insurance rates are a case study in what happens when Washington takes away a government-sponsored benefit that helps a relatively small group of people.

About 1.1 million homeowners — or 1 in 5 in the program — have received taxpayer-subsidized rates and the government has financed about 60 percent of losses on their properties. Most people can retain the subsidies but can’t pass them along to people buying their home, a restriction that’s especially burdensome to lower-income older homeowners seeking to sell their houses.

The changes also promise to make it unaffordable for people in chronic flood zones to keep their homes, and they have put a damper on home sales in areas where benefits extended to current homeowners can’t be passed along to prospective buyers.

The quandary is especially felt by conservative Republicans torn between their philosophy of limited government and helping constituents facing sharply higher flood insurance premiums. Lawmakers trying to delay the law’s implementation cite horror stories of people slapped with unaffordable premium increases on modestly priced homes.

Supporters of the law say it’s mostly operating as intended, which is to hit at-risk homeowners with actuarially sound rate increases.

“What we’re trying to do is separate fact from fiction here. And we’re hearing a lot of rumors. And some of those rumors … it turns out are not as represented,” said Rep. Randy Neugebauer, R-Texas, who chaired a hearing Tuesday of the Financial Services Committee’s housing and insurance subcommittee. “We do know that there are some people out there who are going to experience higher premiums. But, you know, that was the purpose.”

Last year’s legislation promises premium increases to 1.1 million homeowners who’ve received subsidized, below-risk coverage and could sock even more homeowners whose homes met older building standards or were deemed at lower risk under previous flood maps. Under the old rules, they could retain their old rates since they followed the rules when they bought or built their homes, but they will soon lose those grandfathered rates under the new law.

The Federal Emergency Management Agency, which administers the program, has delayed implementation of the new grandfathering rules and has re-evaluated its policies to give homeowners the benefit of the doubt in instances in which older, locally built levees have protected neighborhoods for decades but don’t meet federal standards.

The changes in the program are most acutely felt in places like the Gulf Coast, the New Jersey shore and Florida.

“There are challenges to implementing the law when premiums may exceed $10,000 or in more high-risk areas where homes are not easily elevated or bought out,” said FEMA Administrator Craig Fugate. He noted that in the Gulf region, many middle-class workers need insurance to live near their jobs in industries like fishing, trade and oil exploration.

Some conservative Republicans are adopting a “tough-love” approach to implementing the law.

“The fundamental question posed by the flood insurance reform bill is one of fairness. Is it fair for everyone to subsidize the insurance of a few?” asked Rep. Lynn Westmoreland, R-Ga. “The answer is simple. Taxpayers should not continue to subsidize the flood insurance of those who live in flood-prone areas. It’s not fair.”

The much-criticized program has long offered below-cost rates for homeowners in flood zones and has racked up about $25 billion in red ink since its creation in 1968. It has been criticized for repeatedly paying off homeowners whose houses get flooded every few years.

The flood insurance program collects $3.5 billion in premiums each year, but FEMA says $1.5 billion more is required from subsidized policyholders to put it on sound financial footing as required by last year’s changes.

Financial Services Chairman Jeb Hensarling, R-Texas, didn’t attend Tuesday’s hearing, but a committee statement noted the “importance of implementing the … Flood Insurance Reform Act in order to protect taxpayers from having to continue bailing out” the flood insurance program.

Copyright 2013 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Top 10 Boating Safety Tips – Leave the alcohol on shore

hotboatPHILADELPHIA–(BUSINESS WIRE)–July 02, 2013–

Recreational boating activity soars during warm weather months, and so do boating accidents and injuries. According to the U.S. Coast Guard’s “Boating Statistics 2012,”(1) the most recent year available, there are more than 12 million registered recreational boats in the United States. With so many boaters enjoying the waterways, it is no surprise that more than 4,500 boating accidents, involving nearly 6,000 vessels, were reported in 2012, with far more that go unreported each year. The number of actual boating accidents decreased by 73 from 2011, and overall fatalities decreased significantly, by 14.1 percent to 651 in 2012. While certainly a favorable trend, approximately 3,000 people still required medical treatment beyond first aid as a result of boating accidents. In addition, the total property damage in 2012 from reported accidents was approximately $38 million.

Though the statistics are concerning, the risk of boating injuries and accidents can be minimized. According to the U.S. Coast Guard, the vast majority of reported incidents involved factors that were within the control of boat operators. ACE Recreational Marine Insurance, one of the nation’s largest recreational marine insurance providers, and part of the ACE Group, has again released its top ten list detailing tips to help recreational boaters stay safe, thus potentially reducing the number of preventable accidents that may occur each year.

“Since nearly half of all fatal accidents occur over the summer months, there’s no question that taking steps to promote boating safety, especially when waterways are most crowded, can potentially have a significant impact on saving lives. Safe boating should be the aim of all boaters and comes from active participation in ongoing education and training, as well as hands-on boating experience. Understanding and obeying navigational rules and safety procedures has proven to help reduce injuries and property damage,” said Damon R. Hostetter, Senior Vice President, ACE Recreational Marine Insurance.

ACE Recreational Marine Top Ten Recreational Boating Safety Tips

1. Always wear a life jacket and insist that your crew and guests do the
same. Approximately 71 percent of fatal boating accident victims drowned
in 2012.1 Almost 85 percent of those who drowned were not wearing a life
jacket, and seven out of every ten boaters who drowned were on vessels
less than 21 feet in length. Always have an adequate supply of life
jackets aboard, no matter what the length of your vessel. Make sure that
children are wearing appropriate life jackets that are sized and fitted
correctly. Drowning was the reported cause of death for approximately 42
percent of the children under the age of 13 who perished in boating
accidents in 2012. In cold water areas, life jackets are even more
important. A fall into water colder than 60 degrees (Fahrenheit) can
induce “cold shock” — a sudden gasping for air that can increase the
risk of drowning, especially in older people.

2. Never drink alcohol while boating. Alcohol use was again the leading
factor in all fatal boating accidents, and in 2012 contributed to 17
percent of recreational boating deaths. 1 Stay sharp on the water by
leaving the alcohol on dry land.

3. Take a boating safety course. Only fourteen percent of deaths occurred on
boats where the operator had received boating safety instruction.1 You
may even qualify for a reduced insurance rate if you complete a safety
course. Contact your local Coast Guard Auxiliary, United States Power
Squadron chapter,2 or visit for information on
courses in your area.

4. Stay in control by taking charge of your safety and that of your
passengers. Boaters between the ages of 36 and 55 accounted for the
highest rate of boating fatalities (35 percent) and accidents (27
percent) in 2012.1 It is imperative to maintain control of your vessel
and your passengers. Don’t forget that safety begins with you.

5. Understand and obey boating safety recommendations and navigational
rules. Imagine the mayhem that would result if car drivers disregarded
highway traffic laws. In 2012, violations of navigation rules were
contributing factors in 290 accidents and 13 deaths. Know and understand
boating safety procedures and rules of navigation before taking to the
water, and practice them without fail.

6. Operate at a safe speed and always maintain a proper lookout. Operator
inattention, operator inexperience, machinery failure, excess speed and
improper outlook were major factors in all reported accidents.1 Know your
boat’s limitations as well as your own. Take note of visibility, traffic
density and the proximity of navigation hazards like shoals, rocks or
floating objects. Don’t invite a collision by going faster than is

7. Check the weather forecast. A calm day can quickly turn ugly on the
water. Keep an eye out for changing weather conditions and stay on top of
the forecast while boating. There were 221 accidents and 43 deaths in
2012 attributed to adverse weather conditions. Promptly heed all weather
and storm advisories.

8. Always carry an emergency position locator, especially when boating in
cold waters. Hypothermia is a significant risk factor for injury or even
death while boating. Cold water accelerates the onset and progression of
hypothermia since body heat can be lost 25 times faster in cold water
than in cold air. The closer you are to rescue support, the better your
chances are. Therefore, an Emergency Position Indicating Radio Beacon or
Global Positioning System interfaced Emergency Position Indicating Radio
Beacon (EPIRB/GPIRB), and/or a Personal Locator Beacon (PLB), is
recommended especially when boating in waters that are below 59 F. These
safety devices should be considered when boating in waters of any
temperature. Boaters can be at risk of hypothermia in warm waters as well,
where expected time of survival can be as little as two hours in waters
as warm as 60-70 F. To learn hypothermia risk factors and how to better
your chances of survival, visit:

9. Use a carbon monoxide (CO) detector. Carbon Monoxide can harm and even
kill you inside or on the deck of your boat. All internal combustion
engines emit carbon monoxide, an odorless, tasteless, colorless,
poisonous gas that can make you sick in seconds and kill in minutes. Even
just a few breaths in high enough concentrations can be fatal. Carbon
Monoxide symptoms are similar to seasickness or alcohol intoxication, and
can affect you whether you are underway, moored or anchored. Remember,
you cannot see, smell or taste carbon monoxide, so know the symptoms of
carbon monoxide poisoning and avoid extended use of the transom area when
engines are operating. To learn more about the symptoms of carbon
monoxide sickness and how to keep you and others safe, visit

10. File a float plan. The U.S. Coast Guard recommends that you always tell a
friend or family member where you plan to go and when you’ll be back.
Make it a habit before leaving on any boat trip. The proper officials can
be notified promptly if you don’t return when expected.

According to Mr. Hostetter, educated recreational boaters can result in greater boating responsibility while on the water. “Another important preparation is to have reliable and comprehensive insurance in place. Few people would drive a car without adequate insurance, yet countless recreational boaters take this risk,” he noted.

Boat owners can insure for physical damage coverage to repair or replace the boat if it’s damaged or destroyed by a myriad of causes including running aground, fire, theft, lightning, or windstorm. Covered items include the boat, motors and trailer and other equipment normally required for the operation, navigation or maintenance of the watercraft. Boat owners may be unaware that liability insurance can provide important coverage including obligations to pay for bodily injury, property damage and pollution as a result of the ownership, operation or maintenance of the watercraft. They can also protect themselves and their passengers by purchasing insurance that will cover medical expenses that become necessary due to bodily injury while the person is boarding, aboard, off-loading or being towed behind the watercraft. Boat owners can also insure against the loss of personal property and the costs of towing and emergency assistance.

Another point to consider is that boat owners can also have their vessel checked for safety–for free. The U.S. Coast Guard Auxiliary and U.S. Power Squadrons offer Vessel Safety Checks at no cost. In addition, their staff will check your boat’s equipment and provide information about its use, safety procedures and applicable regulations. Since unsafe boats are a threat to all recreational boaters, it’s important for boat owners to make sure their vessel is as safe as possible. For more information, visit the U.S. Coast Guard web site at

In addition to the boating safety tips above, ACE also offers free preparation guides including, “Hurricanes and Severe Storms” and “Hurricane Preparation Tips for Boaters,” which include detailed recommendations and tips for the owners of trailerable and non-trailerable boats to undertake prior, during and after a storm. Please visit our website to download these safety brochures, by selecting the “Customer Resources” link under “Recreational Marine Products & Services” on the homepage, clicking on the “Boating Safety and Loss Prevention Tips” link, and then choose the brochure by title.

ACE Recreational Marine Insurance, part of the ACE Private Risk Services business of the ACE Group, has been serving marine clients for more than 200 years, since 1792 when its predecessor company wrote the very first marine insurance policy issued in the United States. ACE offers exceptional all-risk insurance coverage to protect the entire spectrum of pleasure yachts and boats, including classic boats, luxury mega-yachts and sailboats, sport fishing boats, ski boats, personal watercraft, high performance vessels and select charter vessels. Product highlights are summaries only; please see actual policy for terms and conditions. Products may not be available in all states. Insurance policies issued by ACE Recreational Marine Insurance are underwritten by the insurance companies of ACE USA

About ACE Private Risk Services

ACE Private Risk Services is the ACE Group’s high-net-worth personal insurance business, which provides specialty coverage for homeowners, automobile, recreational marine, umbrella liability and collections insurance for financially successful individuals and families. Policies issued by Bankers Standard Insurance Co. and ACE Insurance Co. of the Midwest. Additional information can be found at: The ACE Group is one of the world’s largest multiline property and casualty insurers. With operations in 53 countries, ACE provides commercial and personal property and casualty insurance, personal accident supplemental health insurance, reinsurance, and life insurance to a diverse group of clients. ACE Limited, the parent company of the ACE Group, is listed on the New York Stock Exchange (NYSE: ACE) and is a component of the S&P 500 index. Additional information can be found at:


(2) United States Power Squadron.

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Don’t get surprised with something you don’t want, how is your home protected? ACV or RCV? Protecting the House

hail_damaged_house_317183429_largeBy Dean Jarvis
The tragic Moore, Okla., tornado has jump-started what could be a very active tornado term that precedes the start of the Atlantic hurricane season. When these wind-related storms strike, it’s inevitable that roofing claims will follow.

This reality comes amidst a trend over the last year by insurers to revise the coverage terms of their homeowners’ policies, moving from replacement cost value (RCV) to actual cash value (ACV) for the settlement of roof claims. Many (but not all) state insurance departments allow insurers to settle roof claims on an ACV basis, and it can benefit insurers that are seeking to restore profitability to their homeowners market. Rather than increase premiums and potentially lose market share due to the higher costs related to RCV, they can reduce coverage to ACV.

However, these policies—many of which were implemented in late 2012 and have yet to be tested during significant windstorm seasons—are beginning to draw legal scrutiny and questions about whether or not they meet requirements to protect the collateral of mortgage investors.

Regulatory Conflict

Why all the scrutiny? Roof claims settlements on homeowners’ policies that only offer ACV pose significant problems going forward because of the lack of uniformity between state insurance regulators and the federal government-sponsored entities (GSE) of Fannie Mae and Freddie Mac.

On its face, settling roof claims on an ACV-basis seems like an issue for policyholders and insurers only. Digging deeper exposes some problems with that conclusion.

For instance, consumer advocacy organizations have protested that the claims settlement practice of using ACV appears to be predatory against consumers, but experts in insurance, mortgage finance, securities, real estate, and credit ratings also have failed to recognize that Fannie Mae and Freddie Mac have guidelines that require claims to be settled on an RCV-basis.

This requirement brings yet another party into the equation when homeowner roof claims are not settled on an RCV basis: unwitting mortgage investors are harmed when mortgage-backed securities (MBS)—yes, they’re back—are improperly packaged and unloaded by Fannie Mae and Freddie Mac.

Mortgage lenders and servicers are tasked with providing replacement cost coverage for mortgaged properties. The practice of insurers settling claims on an ACV-basis is a sure sign that the controls of lenders and servicers have failed and that false representations and warranties are being made to Fannie Mae and Freddie Mac. Respected credit raters have published articles and provided commentary about the unusual practice of settling roof claims at ACV while leaving the rest of the dwelling coverage at RCV, which is a strategy that some insurers are employing.

All of this means some tough questions need to be answered:

Do state insurance departments have a responsibility to enforce acts similar to the Unfair Trade Practices and Unfair Claims Settlement Act of 2009 in Tennessee?
Do insurers have a legal liability to provide evidence of insurance binders that accurately reflect their claims settlement practices in the forms and endorsements section of the binder?
Do mortgage lenders and servicers have a legal obligation liability to detect when insurers’ claims settlement practices no longer comply with GSE guidelines?
Do GSEs have a legal liability to alert lenders and servicers about insurers that no longer settle roof claims on an RCV-basis?

The aforementioned sequence is important because enforcement at the top solves the problem of evidence of insurance binders that conflict with an insurer’s claims settlement practices. It makes it much easier for lenders and servicers to understand when insurers are no longer in compliance, which will significantly reduce the false representations and warranties made to the GSEs.

Conversely, a lack of enforcement at the top of the list provides immunity for insurers that furnish evidence of insurance binders that conflict with their claims settlement practices, making it virtually impossible for lenders and servicers to detect the conflict, thereby creating the problem of the GSEs improperly packaging securities that contain false representations and warranties.

Therefore, it is vitally important that the evidence of insurance binders and policy booklets match up with the claims settlement practices of an insurance company. Insurers will need to address this incongruity before Fannie Mae and Freddie Mac figure out if they will become proactive in enforcing their guidelines or strike the RCV requirements from their selling and servicing guidelines.

Other Exposures

There are many other questions that need to be answered, including:

Will insurers and E&O providers accept legal liability for agents who provide evidence of insurance binders that conflict with their company’s claims settlement practices?
Will agents have some type of safe harbor protection for violating acts similar to the Unfair Trade Practices and Unfair Claims Settlement Act of 2009 in Tennessee?
Will publicly traded insurers face stock-drop securities litigation for unintentionally misleading investors when they were unfamiliar that GSE guidelines could derail their business projections?
Will Fannie Mae and Freddie Mac blindside homeowners by hitting them with very expensive force-placed coverage for purchasing policies that settle claims at less than RCV?
If Fannie Mae and Freddie Mac continue to ignore their own guidelines that require RCV, how long can compliant insurers continue to compete at what amounts to a competitive disadvantage against insurers that do not comply with GSE guidelines?
Will credit raters downgrade insurers that don’t settle claims on a RCV-basis?

The issue is so pervasive that many homeowners who are paid less than replacement cost to settle their roof claims later find out they are unable to sell their homes until they repair or replace their roofs when they attempt to list their homes for sale with real estate agencies.

Furthermore, insurers who pay claims directly to policyholders without involvement or oversight from lenders and servicers set the stage for homeowners to walk away with a check in hand while their homes go into foreclosure with damaged roofs.

Addressing the Issue

One way to protect homeowners and mortgage investors in the claims settlement process is to require the mortgagee to be listed on any claims check for dwelling damage. That extra step will ensure that unwary homeowners follow through with the repair or replacement of roof damages rather than sabotaging themselves by pocketing claims dollars that were paid on an ACV-basis, forcing them to pay the replacement costs at a later date when they attempt to sell their homes.

Many homeowners are unaware that they will be funding the difference between their claims settlement and the cost of repairing or replacing their roofs before they sell their homes. Likewise, many mortgage investors are unaware that homeowners can pocket claims checks to repair or replace their properties without following through to protect their collateral.

Another effective strategy to detect the root cause of these problems is to review the wording in the forms and endorsements section on the evidence of insurance binders and compare it with the claims settlement practices of the insurer. Insurers that continue to deliver evidence of insurance binders without disclosing that their claims settlement practices have changed from RCV to ACV could encounter litigation.

It is unfair to expect policyholders and mortgage investors to possess the expertise to realize the extent to which they are harmed when insurers fail to settle roof claims in a compliant manner. Unfortunately, they have been put into a “buyer beware” situation because of a lack of transparency from GSEs that are familiar with the problems.

However, the simplest solution to allow for a level playing field is for Fannie Mae and Freddie Mac to drop all pretenses that their securities are packaged properly to protect investors, strike the RCV requirement for claims settlements from their guidelines, and allow mortgage investors to “take one for the team” in much the same manner as GM bondholders did to help the automaker survive.

Federal funds earmarked to subsidize Fannie Mae and Freddie Mac should be escrowed for mortgage investors to cover increased losses. Mortgage investors put their capital at risk in good faith, only to purchase improperly packaged securities that ensure the survival of cash-strapped insurers. They deserve better than being thrown under the bus by the GSE’s willingness to market improperly packaged securities.

It remains to be seen if Fannie Mae and Freddie Mac will eventually enforce their guidelines that require insurers to settle claims on an RCV-basis or continue to rely on taxpayer generosity to cover potential litigation costs. But insurers should consider getting out in front of the issue before it’s too late.


The Option to Decline?

Insurers that offer the option for homeowners to choose between replacement cost value and actual cash value coverage on their insurance policies may want to reconsider the approach.

Consider the following scenario: If someone owns a personal automobile, he has the option to purchase collision and comprehensive coverage. However, if the vehicle is being leased or financed, lienholders require buyers to purchase and maintain collision and comprehensive insurance to ensure the protection of their assets.

Putting homeowners in the position of making policy choices that could result in false representations and warranties to mortgage lenders like Fannie Mae and Freddie Mac—which require home purchasers to buy and maintain replacement cost value coverage in their insurance policies in order to protect their collateral—could create potential bad-faith or error and omission situations if and when a claim occurs.

After all, who wants to explain to a homeowner who has just experienced a loss that a policy decision shouldn’t have been a decision at all?

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On a Leash: Dog Bite Insurance Claim Trends On The Rise….

Dog bites accounted for more than one-third of all homeowners insurance liability claim dollars paid out in 2012, costing more than $489 million, according to the industry’s Insurance Information Institute (III) and insurer State Farm.

While the number of claims fell by 1.4 percent in 2012—the first decline since 2010—the costs of settling dog bite claims continued to rise, by 1.2 percent, last year, according to an analysis of homeowners insurance data by the III.

The average cost paid out for dog bite claims was $29,752 in 2012 compared to $29,396 in 2011.

State Farm identified the top 10 states for dog bite claims paid with California and Illinois leading the pack. (See list below.)

The III said that the decline in the number of claims and increase in claim costs essentially offset one another so that total costs associated with dog bite claims in 2012 were virtually unchanged—down a mere 0.2 percent in 2012, the group said.

The rise in claims costs by even a small amount suggests that medical costs as well as the size of settlements, judgments and jury awards given to plaintiffs are still on the upswing, according to the III.


Year Value of claims ($ millions) Number of claims Average cost per claim








































Percent change, 2011-2012




Percent change, 2003-2012




Source: Insurance Information Institute and State Farm.

State Farm identified the top 10 states for dog bite claims in 2012.

Top 10 States for State Farm Dog Bite Claims in 2012

State Number of claims Claims paid (estimated)
1. California 451 $17.1 million
2. Illinois 337 $9.0 million
3. Texas 236 $4.3 million
4. Ohio 235 $5.0 million
5. Pennsylvania 165 $4.5 million
6. Michigan 151 $4.6 million
7. Indiana 148 $2.7 million
8. Florida 123 $7.1 million
9. Georgia 121 $3.3 million
10. New York 116 $6.4 million
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