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Flood Program Extended Until September 30

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Posted on 01 Jul 2010

On Wednesday night, after already having House approval, the Senate gave the green light for temporary reauthorization of the National Flood Insurance Program (NFIP) until Sept. 30. The reauthorization is retroactive to June 1, when the program had expired.

The measure is now with President Barack Obama for his signature, ending the third lapse in the program in the last year.

Since its latest expiration, about 5.5 million owners of properties in flood zones have been in limbo and people trying to close on sales of properties in flood-prone areas have been forced to wait for the program’s renewal.

Once Obama signs the bill into law, the NFIP should return to normal operations and, since the extension is also retroactive, any new policy applications or renewals that were signed and submitted during its expiration 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).

Congress has batted around several extension plans, including one to the end of the year. But the Senate has been struggling to overcome Republicans fighting any spending that adds to the federal deficit.

The Independent Insurance Agents & Brokers of America (the Big I) expressed frustration at the latest short-term extension to the program, the fifth in the last year.

“It is alarming that the NFIP was allowed to remain expired for so long, causing so much confusion and potentially leaving desperate homeowners and small businesses unprotected for almost a month,” said Robert Rusbuldt, Big I president and CEO, in a statement. “While the Big I is appreciative of Congress extending the program on a temporary basis, we are also greatly concerned that these short expiration periods and patchwork of temporary extensions will negatively impact the market.”

Temporary NFIP extensions and service lapses “during such a delicate period in our economy is of great concern to our agents, homeowners, and small businesses,” according to Charles Symington, Big I senior vice president of government affairs.

“We are increasingly frustrated by this legislative process,” Symington said in a statement. “The National Flood Insurance Program is meant to provide some level of stability and protection for homeowners and businesses against dangerously unpredictable and costly flooding events, not to be an unpredictable ‘here one minute-gone the next’ program subject to the vicissitudes of political gamesmanship. The Big ‘I’ strongly urges Congress to pass a long term extension of this critical program.”

The group representing independent agents and their insurance agencies is urging Congress to approve a long-term extension of the program. The program has worked for more than 40 years to help protect consumers from flood risks, and Congress has traditionally extended the program for five year periods in order to provide stability and security for the marketplace. Unfortunately, Congress has recently only extended the program for short periods, from 30 days to six months.


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