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<br /> <br />LMC <br /> <br />League of Minnesota Cities <br />Insurance Trust <br />145 University Avenue West, St. Paul, MN 55103-2044 <br />(651) 281-1200 · (800) 925-1122 <br />Fax: (651) 281-1298 . TOO: (651) 281-1290 <br />www.lmnc.org <br /> <br />I.-gu.. of Minrauota Cmu <br />CiUu promoting -Jm.C8 <br /> <br />November 29, 2006 <br /> <br />To: LMCIT members and agents <br /> <br />From: LMCIT <br /> <br />Re: Flood insurance - request for comments <br /> <br />The LMCIT Board of Trustees is considering expanding property coverage to provide automatic <br />flood insurance protection for all city buildings. We believe it's feasible to do so. It would <br />involve increased premium costs for many cities, but that cost should be significantly less than <br />the cost of flood insurance through the National Flood Insurance Program (NFIP). <br /> <br />This memo outlines how the proposed flood coverage program would work, and what the costs, <br />risks, and benefits would be. Because this would be a new coverage area with significant cost <br />implications for cities, the LMCIT Board is seeking comments from cities on the concept, and in <br />particular whether or not you would favor implementing a flood insurance program. The <br />Board's final decision will rest in part on the feedback received from members. <br /> <br />Background <br /> <br />Right now many cities have no coverage for flood damage to many of their buildings. LMCIT <br />provides limited flood coverage, but only for certain city buildings. Not every flood is <br />automatically a "disaster, so in any given situation FEMA or state assistance mayor may not be <br />available. <br /> <br />LMCIT currently provides limited coverage for flood damage to certain city buildings. If a city <br />documents that a particular building is outside the SOO-year flood plain, that building is <br />scheduled as "Code A" on the property schedule. A city's "Code A" buildings are covered for <br />flood damage up to a $500,000 annual aggregate limit. That limit applies to all water and flood <br />damage during the year, regardless of the number of incidents or the number of buildings <br />affected. <br /> <br />LMCIT classifies buildings within the SOO-year flood zone as "Code C". For Code C buildings <br />the city's only current option for covering flood damage is to purchase flood insurance through <br />the National Flood Insurance Program (NFIP). Only a handful of cities currently purchase flood <br />coverage, and then only on certain selected buildings. The main reason few cities purchase NFIP <br />flood insurance appears to be cost; an NFIP flood insurance policy for a city building may cost <br />three to six times the LMCIT property premiums for that building. <br /> <br />AN EQUAL OPPORTUNITY/AFFIRMATIVE ACTION EMPLOYER <br />