Are You Ready for Another Flood Season?

My team and I were on the ground in eastern Montana helping families work with their insurance companies to rebuild immediately following the devastating flooding of 2022. Meeting at the civic center in Red Lodge with hundreds of Montanans, we learned the true extent of the damage and devastation families faced. As we drove down a county road just outside of Fromberg − the sound of water pumps grew louder as we approached a rancher’s home encircled by downed trees strewn across his property.

Standing on the bank of the Clark’s Fork of the Yellowstone, the rancher told us he had two feet of water in his basement. The damage to his home only confounded by the scene still playing in his mind of helplessly watching his cattle float down the river.

Stories like this are an upsetting experience shared by hundreds of Montanans. Unfortunately, displaced families returning to their damaged homes have scant options available to help them rebuild. Standard homeowner’s insurance policies do not cover floods. In one of the hardest hit areas − Carbon County − only 80 homeowners had flood insurance. Families were left with only one option, pay out of pocket to rebuild.

As our communities continue to rebuild in the face of another flood season, we Montanans must use the lessons learned last year to protect our homes, businesses, livestock, and farmlands from flood loss.

We graphically learned in 2022 homes not in high-risk flood areas may be vulnerable. Over 25% of homes damaged by floods are in low to moderate-risk areas. For example, the home caught on video floating down the Yellowstone last summer was likely not in a high-risk floodplain due to its elevation above the river. In this case, the fast, rising waters undercut the soil beneath expanding the bank of the river to the front door of the home.

Last summer, I spoke with hundreds of Montanans across the state whose homes and properties were damaged by flooding and without necessary coverage. Most considered policies either cost-prohibitive or were unaware coverage is available for homes that sit outside of floodplain maps. Among the few I spoke with who were covered, many only did so as a requirement of their mortgage.

There are insurance products available through the federal government with the National Flood Insurance Plan (NFIP), as well as private insurers. Private flood insurance may offer more affordable premiums, lower deductibles, and broader coverage options including higher maximums for damaged household items, such as appliances, clothing, and firearms. In addition, a recent rule amendment by the Federal Housing Administration allows homeowners with federally backed mortgages to purchase private flood insurance rather than NFIP plans through FEMA.

Before flood season begins, homeowners should sit down with a trusted insurance professional to discuss their risks and the insurance coverage options available. It is important to keep in mind many flood policies take thirty days to become effective. The cost of insurance verses the risk of loss deters many, but after last year, we are now acutely aware of the enormous potential of loss and damage to homes outside of high-risk areas.

Private flood insurance options are available and often less expensive than traditional federal flood insurance plans. Montanans should evaluate their risk and weigh the consequences of uninsured loss related to flooding.  

Our team is available to answer any insurance-related questions at 406-444-2040 or by going to CSIMT.gov.

Troy Downing is the Commissioner of Securities and Insurance, Montana State Auditor. Commissioner Downing is a two-tour combat veteran, businessman, and entrepreneur.

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