Basic flood insurance for city buildings costs considerably less than first feared; but cost of extra insurance needed later apt to still be scary

The city can buy basic flood protection for 46 of the city's flood-damaged city buildings for $101,129, a sum considerably less than an earlier estimate of $280,000.

The purchase of this basic line of insurance from the National Flood Insurance Program provides $500,000 in coverage for damage to a structure and $500,000 to the structure's contents.

The cost is considerably less than the estimate, in part, because the city has decided it needs a total of $17.08 million in coverage, and the estimate was based on $25 million of coverage, Mike Shoger, the city's risk manager, explained on Wednesday.

Shoger said the actual cost for basic flood protection is less, too, because some buildings at the city's waste water treatment plant are not insurable under the national program; some buildings are a total loss – the Time Check Recreation Center and the Animal Control shelter, for instance – and don't now need insurance; some original damage estimates are less than earlier thought; and the city isn't insuring buildings on the city-owned Sinclair packinghouse site.

In total, 46 buildings and structures – from the Veterans Memorial Building/City Hall, library, bus depot, Science Station and Paramount Theatre to the dugouts at the Tait Cummins Softball Complex – will be protected under the insurance.

For most of the city's flood-damaged buildings, insurance provided by the National Flood Insurance Program is all that will be needed.

However, extra insurance will be needed for major city buildings like the Veterans Memorial Building/City Hall and the Paramount Theatre once the city accepts money from the Federal Emergency Management Agency and begins to make repairs on them.

One estimate put the cost of extra insurance above $3 million a year, an amount that prompted City Council members to ask city staff to request a waiver of insurance from Iowa's insurance commissioner.

Five companies bid to provide basic National Flood Insurance Program coverage to the city.

The bids were evaluated on cost, coverage and deductibles and experience with handling flood insurance.

The city's selection team concluded that TrueNorth of Cedar Rapids provided the “most advantageous” bid to the city from five proposals. The City Council is scheduled to vote on the bids at its Wednesday evening council meeting.

TrueNorth's bid was $101,129; Marcotte Agency of Omaha, Neb., $98,414; Millhiser Smith of Cedar Rapids, $101,247; Stamy Agency of Cedar Rapids, $99,070; and Aon Risk Services of Omaha, Neb., $106,863, according to the city.