BILLINGS — Depending on the proximity to a body of water or the type of mortgage loan, flood insurance is a requirement for certain home and business owners — and it could be on its way to becoming unaffordable.
Mike Kinsey lost his home in Park City to the historic 2022 floods that overtook many areas in the regions along the Yellowstone River. Like many others in the state, he did not have flood insurance when tragedy struck.
"I should have a quarter of a million dollars on this house. I should’ve had a quarter of a million dollars in flood insurance. I don’t. My homeowner’s policy wouldn’t cover anything from the flood. So, I have a denial from them, my mortgage company finally put me in forbearance which means that my payments are stacking up," said Kinsey.
Now obtaining flood insurance may be even more expensive in the future.
Montana is one of 10 states suing the federal government over rate hikes in the National Flood Insurance Program, administered by FEMA, that could see rates skyrocket up to 700%. The states involved recently asked a federal judge to put the hikes on hold. No decision has been made yet.
In coastal regions like Florida and Louisiana, it could make running a business or owning property in a flood plain an impossibility, but impacts can be felt even in landlocked states like Montana.
"The scenery or the functionality of it comes at price for building in those areas so it’s something you want to prepare for. Development in certain areas of the flood plain is ok, but in certain areas it’s not, it’s not the best choice," said Yellowstone County Public Works director and flood plain administrator Tim Miller.
He believes last year’s floods are the biggest reason Montana is a part of this lawsuit.
"A lot of it was due to the extreme flooding that we had last spring. Yellowstone County got affected some but nothing like Park County, Stillwater County and Carbon County. Those counties really got impacted big time. Property loss, business loss, all kinds of losses so I think that’s probably one of the biggest reasons that Montana decided to jump in," added Miller.
But is flood insurance a big concern in Montana? The state saw 591 claims made to the National Flood Insurance Program from 2010-2022, and just 89 of those were in Yellowstone County.
"Less than 5% of our total customer base in the area have flood insurance active at the moment. And over 98% of counties across the United States that have had floods or flooding events in their areas, of that 98%, 4% of those had active flood insurance policies at the time of those events," said Reilly Parisot, who is an account executive and licensed producer at Stockman Bank.
So why did Montana Attorney General Austin Knudsen decide to join the lawsuit? He said it comes down to a procedural matter. "In fundamentally changing how it calculates rates for flood insurance, FEMA bypassed, nearly every requirement under law,"
Whatever the reason, climate scientists argue that no matter where someone lives, things like flood insurance could become a necessity.
"It’s a really big issue that impacts anyone at any moment and so when you have those huge catastrophic weather events like that, being near a body of water, it’s almost inevitable to be affected to some degree," added Parisot.
