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Insurance

Appeal Brief Appeal Letter

Appeal Brief

Desastre1817-DR-WA
ApplicantCity of Snoqualmie
Appeal TypeSecond
PA ID#033-65205-00
PW ID#1617
Date Signed2012-02-15T05:00:00

Citation:                FEMA-1817-DR-WA, City of Snoqualmie, Insurance, PW 1617

Cross-

Reference:            Insurance

Summary:             During January 6 thru January 16, 2009, heavy rains and snow melt resulted in flooding causing four inches of flood water to enter the City of Snoqualmie’s (Applicant) planning building.  The flood water resulted in damage to 1,210 SF of glue down carpeting, 4,840 SF of drywall, and 1,210 LF of eight-inch medium density fiberboard (MDF) base cove.  FEMA prepared PW 1617 to capture the cost for the damages, also stipulating that a flood insurance policy be obtained and maintained covering the building.  The Applicant has general insurance coverage under the Washington Cities Insurance Authority (WCIA).

                               The Applicant submitted its first appeal on November 16, 2009.  The Applicant contends that Section 311, Insurance (42 USC 5154) of the Stafford Act nor does FEMA Disaster Assistance Fact Sheet 9580.3, Insurance Considerations for Applicants does not prohibit the use of a pool or blanket policy for flood coverage.  The Regional Administrator denied the first appeal citing that “a blanket insurance policy, an insurance pool arrangement or some combination thereof does not satisfy the requirement in Title 44 CFR §206.252 and 206.253. 

                                On October 8, 2010, the Applicant submitted its second appeal, reiterating its position in the first appeal.  The Applicant submitted no new information in support of its second appeal.

Issues:                   1.   Does the Applicant’s insurance policy satisfy the regulatory requirements?

2.      Must the Applicant comply with the insurance requirements of 44 CFR §206.252(d), even though they have coverage under WCIA?

Findings:               1.   No.  In accordance with 44 CFR §206.252, blanket insurance, pool arrangements, or any combination thereof does not satisfy the regulation. 

 2.      Yes.  To be eligible for Public Assistance funding, the Applicant must comply with 44 CFR §206.252, and be fully covered by NFIP and/or a standard flood insurance policy.    

Rationale:             CFR §206.252 (d), Insurance requirements for facilities damaged by flood, 44 CFR §253 (b)(2), Insurance requirements for facilities damaged by disasters other than flood, FEMA Disaster Assistance Fact Sheet 9580.3 Insurance Consideration for Applicants

Appeal Letter

February 15, 2012

Jim Mullen

Director

Emergency Management Division

State of Washington Military Department

MS: TA-20, Building 20

Camp Murray, WA 98430-5122

Re:   Second Appeal–City of Snoqualmie, PA ID 033-65205-00, Insurance,  FEMA-1817-DR-WA, Project Worksheet (PW) 1617

Dear Mr. Mullen:

This is in response to a letter from your office dated December 6, 2010, which transmitted the referenced second appeal on behalf of the City of Snoqualmie (Applicant).  The Applicant is appealing the Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) requirements for obtaining and maintaining insurance as a condition of receiving assistance.

Background 

In January 2009, heavy rains and snow melt resulted in flooding that caused damage to the Applicant’s planning building.  FEMA prepared Project Worksheet (PW) 1617 in the amount of $23,314 for the repair of the damage.  A mandatory National Flood Insurance Program (NFIP) reduction of $12,988 was taken and the PW stipulated that the Applicant must purchase and maintain flood insurance on the facility.  The Applicant has general insurance coverage under the Washington Cities Insurance Authority (WCIA), a municipal self-insurance pool.  The WCIA property program provides blanket coverage to its members using a combination of commercial insurance and self-funded pooling. 

First Appeal

The Applicant submitted its first appeal in a letter dated November 16, 2009.  The Applicant asserted that the Robert T. Stafford Disaster Relief and Emergency Assistance Act makes no specific prohibition against using blanket or pooled insurance policies to meet the obtain and maintain requirement in FEMA regulations at 44 CFR §206.252, Insurance requirement for facilities damaged by flood.  On July 14, 2010, the Regional Administrator denied the Applicant’s first appeal, citing 44 CFR §206.253(b)(2), which states that “[s]uch arrangement may be accepted for other than flood damages.”  This provision, in effect, means that pool insurance arrangements do not meet the insurance requirements for facilities damaged by flooding.

Second Appeal

The Applicant submitted its second appeal in a letter dated October 8, 2010, and the State forwarded it to FEMA in a letter dated December 6, 2010.  The Applicant reiterated its position in the first appeal.  The Applicant asserts that the flood insurance from WCIA complies with

44 CFR §206.252, which the Applicant asserts is the only regulation applicable in this case.  The Applicant did not provide new information to support its second appeal request.

Discussion

Pursuant to FEMA regulations at 44 CFR §206.252(d), an applicant must purchase and maintain flood insurance in the amount of eligible disaster assistance as condition of receiving Public Assistance funding for the repair of its facility.  The Applicant states that 44 CFR §206.252 does not prohibit the use of blanket or pool insurance coverage and that since the damage was caused by flooding that is the only section that applies.  FEMA has determined that although 44 CFR §206.252 does not specifically prohibit blanket or pool insurance, when read in conjunction with 44 CFR §206.253(b), blanket insurance or insurance pool arrangements can only be used for facilities damaged by disasters other than floods. 

Conclusion

I have reviewed the information submitted with the appeal and have determined that the Regional Administrator’s decision in the first appeal is consistent with Public Assistance regulations and policies. Accordingly, I am denying the second appeal.

Please inform the Applicant of my decision.  This determination is the final decision on this matter pursuant to 44 CFR §206.206, Appeals.

Sincerely,

/s/

Deborah Ingram

Assistant Administrator

Recovery Directorate

cc: Ken Murphy

      Regional Administrator

      FEMA Region X