After sending their harbormaster to Rikuzentakata, Japan, in June to gain knowledge about tsunami preparedness, port commissioners are exploring the option of insuring their buildings against flood and tsunami damage.
Harbormaster Charlie Helms on Tuesday noted Rikuzentakata officials built a massive sea wall to protect their community from a tsunami. However, he said, “there’s no way we could ever find the funding to do that.”
“The only other real option is insuring the buildings against flood and tsunami damage,” Helms said. “So we got elevation certificates on all of our buildings and Bill (Cochran) has shopped it around and gotten some prices on our other option of protecting what’s here and how to recover from a tsunami.”
Cochran, co-owner of Redwoods Leavitt Insurance Agency, said he focused on structural buildings such as the art gallery, the old Englund Marine building, Alber’s Seafood, Pacific Choice Seafoods, Fashion Blacksmith, the Inner Boat Basin and the RV park. Insurance options for the harbor’s docks is a separate discussion, Cochran said.
He said the quotes his office came up with varies from a $1,250 deductible to a $50,000 deductible.
“Obviously the lower the deductible, the higher the premium,” Cochran said. “You would have to let me know what the amount of risk was that you wanted to take per building, and remember, this is not per occurrence, it’s per building. If you have a situation where two or three buildings were damaged, you’ve got a per-building deductible for each one of the structures.”
Flood and tsunami insurance purchased through the National Flood Insurance Program would cover up the harbor’s buildings up to $500,000, according to Cochran.
According to Cochran, the harbor currently has insurance coverage against damage from fire, windstorm, hail storm and explosion. He said flood insurance is usually purchased through the National Flood Insurance program, although Lloyd’s of London may offer terms for flood insurance coverage that may be better.
Helms said the harbor district would want insurance coverage that would allow for replacing any buildings that were destroyed in a flood or a tsunami.
Harbor Commissioner Wes White, looking at a list of current valuations for the harbor’s buildings, noted that in some cases, the flood insurance coverage wouldn’t include a structure’s entire value.
“If we took, for instance, Albers — its current value is $1.5 million,” White said. “If we’re only getting covered $500,000, we’re out $1.023 million.”
White asked what role the Federal Emergency Management Agency and the California Office of Emergency Services would play in helping the harbor rebuild after a major disaster. After adding them up, White said the harbor would pay between $18,000 and $32,000 a year in premiums depending on its deductible.
Cochran said White’s calculations were correct.
Helms noted that even if FEMA would help the harbor rebuild from a major disaster, the port would still have to cover 6.25 percent of the cost of the damage. That’s where having insurance may help, he said.
The Crescent City Harbor District is currently paying down a $5.5 million US Department of Agriculture loan to rebuild the inner boat basin following tsunamis in 2006 and 2011. Most of the money to rebuild came from state and federal funding agencies.
However, according to Helms, insurance coverage on the harbor’s administrative dock covered the 6.25 percent share to replace it following the two tsunamis.
“It was a big (process) because CalOES and FEMA both wanted to know how much insurance funding we’re getting because that affected how much they would pay to getting it built to the standard that it was,” Helms said.
Helms suggested tabling the issue to allow commissioners to get more information about purchasing flood or tsunami insurance. White said he’d like to find out what the true replacement costs would be for the harbor’s buildings.
According to Cochran, the one harbor facility that has flood insurance coverage is Citizens Dock. He said the inner boat basin didn’t have flood insurance coverage because it was designed to resist a 50-year tsunami. He asked if the commission would be interested in finding out what it would cost to insure the inner boat basin against a tsunami.
Helms said yes.
White’s colleague, Jim Ramsey, noted that even if it is tsunami resistant, not having tsunami insurance on the inner boat basin “doesn’t make a whole heck of a lot of sense.”
Reach Jessica Cejnar at firstname.lastname@example.org