News Summary
The San Diego City Council has approved a five-year insurance plan costing over $250 million to cover potential flood damage claims. With $50 million allocated for the upcoming fiscal year, the plan aims to address ongoing concerns about the city’s handling of flood-related claims. Despite the approval, residents impacted by severe flooding, particularly from January 2024, express dissatisfaction over delayed compensation from the insurance provider, PRISM. City officials highlight long-term savings, but residents struggle with significant financial losses and inadequate disaster relief.
San Diego – The San Diego City Council has recently approved a five-year insurance plan estimated to cost over $250 million. The plan is designed to manage potential liabilities from flood damage claims, with approximately $50 million allocated for the upcoming fiscal year starting July 1. Public Risk Innovation, Solutions and Management (PRISM) has been selected as the insurance provider.
The decision to approve the insurance contract was made during a council meeting in which members did not raise significant questions regarding the agreement. However, the approval comes amid ongoing concerns regarding the city’s handling of claims related to flooding incidents, particularly those stemming from severe rains in January 2024. Notably, PRISM has yet to compensate residents affected by this flooding.
City officials, including Mayor Todd Gloria and City Attorney Heather Ferbert, did not disclose whether the city has filed any claims against PRISM related to these flood damages. Despite the city’s ongoing litigation and countersuits against potentially 1,000 individuals and businesses, denying liability for flood claims, flood victims continue to express their concerns. Many of these individuals, comprising working families and seniors, report suffering significant financial losses. Some residents are still living in homes that were damaged during the floods.
Councilmember Raul Campillo highlighted that the city’s new insurance agreement is expected to generate significant savings in the long run. However, city attorneys have refrained from commenting on any pending litigation or the specific terms of the new insurance policy as it relates to flood claims. Evidence suggests that victims are receiving scant financial aid from the city, with many left to bear the financial burden on their own.
Residents’ estimates for their flood-related losses paint a grim picture, with reports indicating some individuals facing damages exceeding $60,000. The current situation is exacerbated by the city’s infrastructure challenges. San Diego primarily operates as a self-insured entity, handling routine claims independently. For catastrophic events, such as flooding, the city participates in a pooled insurance program with PRISM, which is designed to limit costly claims and service over 360 governmental entities across California, generating over $2 billion in annual revenue.
Under the new policy with PRISM, the city can submit claims up to $50 million; however, it must first incur at least $5 million in eligible expenses before reimbursement can occur. Concerns about ongoing litigation suggest that funds necessary for victim relief may be reduced due to high costs associated with these legal strategies, which could further complicate recovery options for individuals impacted by the floods.
Historically, San Diego’s stormwater management infrastructure has been criticized for being outdated and in poor condition. The current deficit in stormwater management is estimated to exceed $5 billion, mainly attributed to deferred maintenance. Recent studies underscore that significant portions of the flood channels, particularly in the Chollas Creek area, require urgent repairs and upgrades. In response to these infrastructure problems, the city’s mayor previously sought $85.1 million for storm infrastructure projects, but the budget ultimately allocated only around $8 million for ongoing maintenance initiatives.
The flooding on January 22, 2024, was particularly severe, leading to widespread damage that necessitated emergency maintenance on city channels and systems. As the city engages in litigation while dealing with significant infrastructural challenges, residents are left awaiting much-needed financial relief and structural improvements.
Deeper Dive: News & Info About This Topic
HERE Resources
CalAssist Mortgage Fund Provides Relief for Homeowners
San Diego Files Countersuits Against Flood Victims
California Wildfires Spark Concerns Over Insurance and Recovery
Additional Resources
- San Diego Union Tribune: Insurance Policy for Flood Victims
- Wikipedia: Flood Insurance
- Fox 5 San Diego: Discounted Flood Insurance
- Google Search: Flood Insurance California
- NBC San Diego: Flood Preparation Information
- Encyclopedia Britannica: Flood
- 10 News: Preparing for Storms and Flood Insurance
- Google News: California Floods
