Home owners in need of flood insurance can rest assured. Last night, the United States Senate reauthorized the national flood insurance program until September 30, 2010; according to the National Underwriter.
“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, president and chief executive officer of the IIABA in a statement.
He added that we “are also greatly concerned that these short expiration periods and patchwork of temporary extensions will negatively impact the market.”
The current measure, as soon as it is signed by President Obama, allows any new policy applications or renewals that were signed and submitted during the hiatus to become effective from the date of application (or in the case of waiting periods, the waiting period will start from the date of application).
The bill would restore authorization of a program that lapsed June 1; marking the fourth time the program has lapsed.
Short-term reauthorizations have been held up because the program is being held hostage to efforts by Democrats to use it as an incentive to get Republicans to act on their other priorities, for example, extensions of jobless insurance and a program that subsidizes healthcare coverage for the unemployed.
Action on a longer-term extension has been delayed because the program has a deficit nearing $20 billion, but Congress is reluctant to act to reduce that deficit by raising rates to “market level” because that would generate severe criticism from hard-pressed homeowners.
The temporary extension bill passed by the Senate was passed by the House on June 23.
Insurance industry officials have reacted strongly by demanding that Congress restore certainty to the program and promptly adopt a long-term extension.
While praising the bills passage, Jimi Grande, National Association of Mutual Insurance Companies senior vice president of federal and political affairs said, “The hurricane season runs two months beyond the NFIP’s new Sept. 30 expiration date. Congress must not let the program lapse again, but that’s just the minimum. The best thing they can do is take this time to pass legislation that would implement common sense reforms and help the NFIP make the first steps towards financial soundness.”
“This is yet another short term fix, as Congress has once again kicked the can down the road…,” said Professional Insurance Agents National President-elect Brian Marino, co-chair of the association’s working group on natural catastrophes. “Although we greatly appreciate the short term extension, Congress has failed to extend the program through the Atlantic hurricane season. With our economy in peril, we cannot have closings held in limbo. The real estate market has again suffered due to this needless lapse in coverage.”
“We’re pleased this program has been extended, even if it’s for a short time,” said Leigh Ann Pusey, president and CEO of the American Insurance Association. “Between now and September, Congress must pass a long-term extension.”
“We are pleased that Congress reauthorized the flood insurance program,” said David Sampson, president and CEO of the Property Casualty Insurers Association of America. “But this three-month extension threatens to leave communities vulnerable again in September, at the height of hurricane season.”
Courtesy of the National Underwriter