National Flood Insurance Program Extended to Nov. 18

Posted in Home Insurance

September 30th, 2011

With a long history of expirations, many wondered whether the National Flood Insurance Program (NFIP) would expire again today. However, lawmakers were able to force an extension of the program that has given the program a new expiration date of Nov. 18.

Bi-Partisan Deal Averts National Flood Insurance Program Expiration

Anyone who carries flood insurance knows that the National Flood Insurance Program has seen its share of ups and downs over the past couple of years.

Experiencing eight program extensions between March 2009 and Sept. 2010, lawmakers had a hard time making decisions about the direction of the program as well as managing its funding.

In Sept. 2010, lawmakers were able to extend the program for an entire year, marking its expiration date as Sept. 30, 2011–today. Luckily, Senate members were able to come to a bi-partisan deal with a consenting 79-12 vote that helped the program avoid another expiration.

Why Wasn’t NFIP Extended for a Longer Period?

One big question often rests on the minds of flood insurance policyholders, which is why can’t the NFIP be extended for a longer period? There have been clashes for the past couple of years on how disaster relief funding should be distributed–whether it should only be designated to flood victims or also to those with wind damage from hurricanes.

In Sept. 2010, the full-year extension was granted to give lawmakers time to determine how relief funds should be handled. Also, it would give them time to come up with more ways to fund the program.

This latest extension is expected to give lawmakers the additional breathing room they need to attempt a long-term reform and reauthorization of the 43-year old program. Bills have been floating around Congress in hopes of coming to a resolution. The Senate Banking Committee unanimously sent a bill to the floor on Sept. 8, while the House passed its own version by a 406-22 vote in July.

Both bills would extend the program for five years and include market-based changes, including a phase-in of actuarially-supported rates, premium increases and limits on subsidies. Congress members are on leave but will return in October to merge their bills before Nov. 18.