Minnesota Governor Pawlenty Announces Proposal To Require Disclosure Of Flood Insurance Eligiblity

Says confusion over flood insurance is a problem that must be addressed

August 24, 2007 -- Elgin, Minn. – Visiting southeastern Minnesota communities hit by flooding, Minnesota Governor Tim Pawlenty today announced a proposal to require insurance companies to tell Minnesotans about their eligibility for flood insurance.

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“Many Minnesotans are unaware they are able to purchase flood insurance for their home,” Governor Pawlenty said. “In some cases, people living through this disaster in southeastern Minnesota were told that couldn’t get flood insurance. We need to ensure that people have good information when they buy insurance so they can make the best decision about what’s right for them and their families.”

The Governor’s proposal would require that insurance companies inform Minnesotans about the opportunity to purchase flood insurance when an initial home insurance policy is sold. Companies and agents could also provide a price quote for flood insurance at that time.

In addition, the Governor’s plan would require insurance companies to disclose all natural disaster-related coverage, such as flooding or mudslides, not included in the basic homeowner’s insurance policy.

In Minnesota, 92 percent of residents live in areas that are eligible for flood insurance through the National Flood Insurance Program. Homeowners do not need to live in a flood plain to purchase flood insurance. According to the Minnesota Department of Commerce, the average premium for flood insurance is $400 per year, but that cost can be lower or higher depending on coverage levels and flood risk.

The Governor’s proposal would need legislative approval. More information about insurance issues can be found on the Department of Commerce website at www.commerce.state.mn.us.

Source: Minnesota Governor