The U.S. House of Representatives passed the National Flood Insurance Program (NFIP) Extension Act of 2009, H.R. 3139, which extends the program until March 31, 2010. The NFIP is currently set to expire on September 30, 2009.
Earlier this year, an extension was signed by President Obama just hours before the program was set to expire. The current extension should provide Congress with additional time to continue working on long-term improvements to the NFIP, industry groups say.
“This extension is just a temporary fix, but a significant and welcome development for the millions of homeowners and small businesses who count on NFIP as a safety net in the event of flooding,” said Charles E. Symington Jr., the Independent Insurance Agents & Brokers of America’s (the Big “I”) senior vice president for government affairs. “If the NFIP is allowed to expire, millions of consumers will be left vulnerable the next time a flood devastates a community.”
Flood insurance is mandated for certain mortgages if the home is located in floodplains. If the NFIP expired, real-estate transactions in flood-prone areas would come to a halt.
“We cannot afford to compound the economic challenges our nation already faces by allowing the NFIP to lapse,” said David A. Sampson, president and CEO of the Property Casualty Insurers Association of America (PCI). “This legislation will ensure that flood insurance consumers continue to be protected.
As of press time, there was no word on whether the Senate would take action on the NFIP extension act prior to recess.
“It’s critical that we make sure coverage remains available for citizens living in flood-prone areas,” said Leigh Ann Pusey, president and CEO of the American Insurance Association.
Insurers, agents and brokers hope to see a long-term solution emerge in Congress to solve many of the problems that surround the NFIP.
In the 110th Congress, the Flood Insurance Reform and Modernization (FIRM) Act of 2007 made progress in the House and Senate. The legislation would have extended the program for five years and made significant and needed reforms to help put the program on sound financial footing, according to the Big “I.” Another reform effort is expected to move forward during the 111th Congress.
The Big “I” supports a long term reauthorization that contains significant reforms, especially the increase in maximum coverage limits and the addition of optional business interruption insurance.
“Unfortunately, recent years have provided too many examples of the destruction left behind by floods that highlight the urgency and importance of updating the NFIP,” says John Prible, Big “I” assistant vice president for federal government affairs. “The Big ‘I’ strongly believes that homeowners and businesses need both higher coverage limits and business interruption insurance to adequately insure their property. We hope that as Congress considers a long term reauthorization,” Prible said.
Sources: AIA, IIABA, PCI
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