California’s Oroville dam appeared as though it was on the verge of failing before its emergency spillway was used for the first time in the dam’s 50-year existence and the overflow was emptied.
Phew!
But the near-catastrophe is still a cause for cautious, not panicked, concern according to a Golden State provider.
Golden Bear Insurance’s vice president, Michael Brown, said they sold “a couple” of flood policies in the Oroville area until their reinsurer put a moratorium on sales in the affected region, pending an understanding of the risk.
“It’s a great conversation starter - if you don’t have flood insurance yet let’s look into it and see what kind of benefits you can gain, if you do have flood insurance let’s pull out the policy and make sure the limits are adequate,” Brown said.
“Make sure your deductibles are manageable. In a lot of cases when people think about catastrophe insurance they ask for the highest deductible that’s available to lower the premium. In a scenario like this, where real people are having real losses right here in our neighbourhood, it makes sense to take another look at that.”
Though the area around Oroville, California was evacuated, no-one’s home was destroyed, though Highway 50, near Lake Tahoe, and Highway 1, near Big Sur, were flooded and some bridges were weakened.
“We’re getting a look at the soft, white underbelly of California’s infrastructure,” Brown said.
Commercial lines make up most of Golden Bear’s flood business, though it has only received one call concerning business interruption due to the evacuations, and it is still determining whether it exceeds the deductible. However, Brown said business interruption claims rarely come up after one or two days and usually only after a full week of road closures or evacuations.
He remains wary of further risks, however, because close to Brown and Golden Bear’s Stockton, California, office is another area of flood risk.
“The Lake Don Pedro Dam is in a similar circumstance (as the Oroville one) - it’s the lowest elevation reservoir in California, it’s one of the last lines of defence for snow melt,” Brown said.
“It’s usually between 40 and 60% full this time of year, waiting for the spring snow melt to flow in. About 10 days ago it was well over 90% full and they had to release much more water than they normally would down the Tuolumne River which flows right through Modesto.”
Though there was concern the overflow would rise over the riverbanks and into Brown’s backyard, it passed without incident.
Another close call and another cause for cautious concern.
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