The flood program slipped into a technical lapse at midnight on February 28, 2010 after Sen. Jim Bunning (R-KY) blocked passage under unanimous consent of a bill to extend unemployment and COBRA benefits. The extension of the National Flood Insurance Program (NFIP) was attached to that bill.
“While this lapse in the flood insurance program will likely be corrected retroactively this week in the Senate, it is disappointing,” said PIA National Director of Federal Affairs Mike Becker. “Insurance agents and their clients who need flood insurance are now at a disadvantage. Many real estate transactions require flood insurance, and the NFIP is the sole source for more than 95 percent of the flood coverage nationwide. We could see real estate closings delayed until this is fixed.”
The Senate was expected to take up a bill extending various programs including the flood insurance program as early as Monday, March 1.
Congress has been extending the flood insurance program for short intervals over the past two years. Efforts to enact comprehensive reforms to the NFIP have been stymied in recent years over two issues: proposals to add coverage for wind damage to the flood program and forgiving the nearly $20 billion debt amassed by the program as a result of catastrophic storms in 2004 and 2005. PIA opposes inclusion of wind coverage in the NFIP program and supports debt forgiveness.
As currently drafted, the latest extension of the flood insurance would be for just 30 days. PIA is recommending that the interim extension be for at least six months.
“These short extensions are insufficient to maintain certainty in the market,” said Becker. “Congress has a lot on its plate at the moment and since lawmakers don’t have time to conduct hearings on reforms to the flood program, the program should be extended for at least another six months so that hearings can be held in a sufficiently deliberative manner.”
Becker added that any comprehensive flood insurance program reform bill should include a five-year authorization.