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W W W. M A I N E B I Z . B I Z 19 D E C E M B E R 2 , 2 0 2 4 F O C U S B A N K I N G / F I N A N C E / I N S U R A N C E By contrast, the National Flood Insurance Program is the primary source of coverage for water and flood damage. But only about 1.3% of all Maine proper- ties are enrolled in the program. e need for the program is acceler- ating. In the decade from 2013 to 2023, there were 443 NFIP claims in Maine with a total payout of over $16 million. In 2023 alone, there were 164 claims and a total payout of $8 million. However, NIFP provides limited benefits. It covers up to $250,000 for a residential building and property and up to $100,000 for contents. NFIP's commercial policies provide up to $500,000 for structures and up to $500,000 for contents. Limited uptake Like the public option, uptake on private flood insurance is also small. Carey cites National Association of Insurance Commissioners data for Maine of fewer than 1,000 residential flood insurance policies and 1,100 commercial policies. "e bottom line is that most properties in Maine are not covered for flooding or water damage," says Carey. A "community rating system" has had little luck. e FEMA program extends premium discounts to NFIP policy- holders in communities that implement additional flood protection activities, such as adopting a flood hazard mitiga- tion plan. Discounts can be as much as a 45% reduction in flood insurance. But only 22 Maine communities par- ticipate in the rating system. "e key message is, so far, Maine communities haven't availed them- selves of the community discount program," says Carey. Carey says the state has a role to play in promoting national and private flood insurance to improve uptake. "I put out press releases that there are programs out there," says Carey. "But it's a bit of an uphill slog." Destabilization Climate change and associated severe weather events are destabi- lizing the insurance industry, says Cale Pickford, director of Allen Insurance and Financial's Compass Group in Camden. However, insurers in Maine haven't been as directly impacted by severe weather-related losses. "From the perspective of climate risk, Maine is still seen as a relatively safe place to insure," he says. But Maine is not immune to "macro trends characterized by increasing rates and an unwillingness of many insurers to cover what is perceived to be higher risk homes and commercial properties," he adds. Reinsurance — insurance that insurers buy to offset large losses — has increased in cost dramatically, with Maine insurance consumers footing some of the bill for large losses in other states, Pickford says. Says Timothy McGonagle, a partner and senior vice president at United Insurance in Portland, "With so many weather events last year, it's quite possible FEMA could adjust their rates to better reflect a prop- erty's risk to offset last year's consid- erable losses." Limited liability In recent years, Travis Fifield antici- pated worsening storms and proac- tively rebuilt and raised his wharf at Fifield Lobster Co. in Stonington. Gretchen Jones Banking and Finance Attorney Gretchen has extensive experience in representing businesses and financial institutions in transactional matters as well as before the Maine Legislature, members of Congress, federal financial regulators and state agencies. She also represents individuals and business entities in business succession and transition planning and estate planning and administration. Her expertise encompasses serving as general outside counsel; go governance; regulatory compliance; finance; charter conversions; and mergers, acquisitions and reorganizations. 1-800-564-0111 | eatonpeabody.com Augusta | Bangor | Ellsworth | Portland P H O T O / C O U R T E S Y T OW N O F S T O N I N G T O N Linda Nelson is Stonington's director of economic and community development and co-chair of the Maine Infrastructure Rebuilding and Resilience Commission. C O N T I N U E D O N F O L L OW I N G PA G E » Climate change is harming the daily lives and future prospects of Maine people, and our communities need help. — Linda Nelson Stonington

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