Flood Program Short Term Reprieve

The cat and mouse games continue in our nation's capital...this time it involves Flood Insurance.

The provision reauthorizing the National Flood Insurance Program (NFIP) is effective retroactively to Feb. 28 and extends the program until May 31, 2010, the day before the new hurricane season officially starts. Forecasters have warned that this coming season could be one with above-average storm activity.

The Independent Insurance Agents & Brokers of America (Big "I") said it is concerned that Congress has only extended the program for a brief period again.

Congress failed to extend the NFIP before leaving for recess last month, resulting in the program's expiration on March 28. Since March 29, the program has been in what the Federal Emergency Management Agency (FEMA) calls a "hiatus period", meaning that no flood insurance policies could be issued or renewed. In addition, existing policyholders could not increase their coverage. This was the second lapse in flood insurance coverage this year. The NFIP also expired on Feb. 28, 2010, but Congress did not reauthorize the program until March 2.

"It is alarming that the NFIP was allowed to expire, causing so much confusion and potentially leaving desperate homeowners and small businesses unprotected for more than two weeks," said Robert Rusbuldt, Big "I" president and CEO. "The Big 'I' is greatly concerned that these short expiration periods, coupled with the uncertainty of temporary extensions, will negatively impact the market."

Since the extension is retroactive, any new policy applications or renewals that were signed and submitted during the hiatus will be effective from the date of application or, in the case of waiting periods, the waiting period will start from the date of application, according to the agents' group.

"This series of temporary extensions, last minute actions and service lapses during such a delicate period in our economy is of great concern to our agents, homeowners and small businesses," said Charles Symington, Big "I" senior vice president of government affairs. "Though we are grateful that Congress extended this program, we are increasingly frustrated by these repeated one-month extensions and the periods of expiration that sometimes result from them."

Insurers, too, expressed frustration with Congress....YOU SHOULD BE THOROUGHLY DISGUSTED WITH THEM AS WELL!