Posted on 15 Jun 2010
Since June 1, the official start date of the Atlantic hurricane season, no flood insurance policies have been issued or renewed due to the expiration of the National Flood Insurance Program (NFIP).
The NFIP expired on May 31, resulting in the third lapse in the ability to purchase flood insurance coverage this year. No NFIP policies can be issued or renewed until Congress reauthorizes the program. In addition, existing policyholders cannot increase their coverage limits during the program’s hiatus, which is particularly troubling for those who may be impacted by the Deepwater Horizon oil spill should a storm occur.
“It is time to put politics aside and reauthorize the flood insurance program,” said Ben McKay, senior vice president of federal government relations for the Property Casualty Insurers Association of America (PCI). “We are now three weeks into hurricane season and homeowners still cannot purchase flood insurance.”
The NFIP hiatus will also prevent real estate closings from occurring, if a property is in a floodplain where the purchaser is required to obtain flood coverage under federally-backed mortgage requirements.
“We need a long-term, sustainable solution to the flood program,” said McKay. “But if nothing else, we have to immediately address the coastal homeowners who are preparing for hurricane season now.”
The NFIP protects over 5.5 million homeowners across the country. Floods are the most common natural disasters to occur in the United States and there are NFIP policies in every state.
“Even if a homeowner purchases a policy today, they will not have flood protection until after the July 4 holidays,” said McKay. “There is a 30 day waiting period from when an NFIP policy is purchased until it goes into effect. Congress is wagering a dangerous gamble.”