Federal Flood Insurance Program Receives 1-Month Extension

Posted in Home Insurance

October 6th, 2009

On September 30, 2009, the Senate passed a temporary 31-day extension of the Federal Flood Insurance Program (NFIP), which was set to expire on that day. Now, the program, which issues flood insurance to homeowners in and around flood plains, will expire on October 31, 2009.

The temporary extension was passed as a part of the House Senate Conference Report on H.R. 2918, the “Legislative Branch Appropriations Act 2010.” Ironically, the expiration was set to come at a time when millions of policyholders would have renewed – and others living in areas that have unexpectedly flooded recently, such as Georgia, would be left without the option to purchase coverage.

But those are not the only problems associated with not extending the program. There would also be negative effects on those homeowners who live in flood plains with federally-backed mortgages since they are require by law to maintain flood insurance.

However, many insurers feel that the real solution is a long-term extension, especially in the midst of a suffering economy with the possibility of more unpredictable weather. Just as many uninsured Georgia homeowners found, the repercussions of not carrying flood insurance can be detrimental on both personal and federal levels.

The good news is David A. Sampson, president and CEO of the Property Casualty Insurers Association of America (PCI), says he plans to work closely with the House and Senate to advocate a long-term extension. His plan is to help develop a program that will be fiscally sound and not expand into unnecessary areas like windstorm coverage, which is already carried through private insurers.

Do you live in or near a flood plain? If so, do you currently carry flood insurance?