Insurance group critical of Congress
Published: June 22,2010
WASHINGTON — The continuing failure of Congress to extend the National Flood Insurance Program (NFIP) is placing homeowners at risk during the hurricane season and with the BP oil leak continuing, according to the National Association of Professional Insurance Agents (PIA).
The nation’s flood insurance program has been in lapsed status since June 1, after Congress failed to extend it past its May 31 expiration date. On June 17, the Senate voted down a package that included a NFIP extension. The House has already approved an extension.
“Congress has failed to extend the flood insurance program, with the hurricane season underway and the BP oil leak continuing in the Gulf of Mexico,” said PIA National president-elect Brian Marino, co-chair of the association’s working group on natural catastrophes. “The lack of action to renew the flood insurance program means homeowners still cannot obtain new flood insurance coverage through the NFIP.”
“This is a serious situation and the lack of action by Congress is irresponsible,” Marino said. “Since the NFIP lapsed, 20 people lost their lives in flash floods in Arkansas and in May, 29 people were killed in extreme flash flooding in Tennessee, Mississippi and Kentucky. Property damage was extensive everywhere. Allowing the flood insurance program to lapse is just not an acceptable option.”
The flood insurance program lapsed at midnight on June 1, just as the 2010 Atlantic hurricane season started. It’s the fourth time this year that Congress has allowed the NFIP to slip into lapsed status. While no new policies can be issued during a lapse in NFIP authorization, consumers with current flood insurance policies remain covered. Claims payments are not affected.
“What’s affected are pending real estate transactions,” Marino said. “Many mortgage lenders require proof of flood insurance and with the NFIP lapsed and unable to write new policies, closings may be delayed. With the country struggling to recover from recession, allowing real estate transactions to grind to a halt is counterproductive.”
PIA sent a letter to Senate leaders on June 18 urging quick action.
“The NFIP plays a vital role in helping citizens protect themselves from the devastating losses floods can cause, making it critical to reauthorize the program right away,” the PIA letter states. “Renewal of the National Flood Insurance Program is not a controversial item. It has broad support in Congress and with the public at large.”
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