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Flood Insurance Program Expires for At Least Two Weeks

Congress adjourned on March 26 after failing to extend the authorization for the National Flood Insurance Program (NFIP). As a result of Congress' inaction, the...
April 1, 2010

Congress adjourned on March 26 after failing to extend the authorization for the National Flood Insurance Program (NFIP). As a result of Congress' inaction, the federal flood insurance program's authority to write new policies ended on Sunday, March 28 at midnight.

Until a reauthorization is passed, insurance agents will not be able to provide new or renewal flood insurance policies required by lenders to close on some real estate sales. A similar hiatus occurred at the end of February when the program lapsed for two days until Congress renewed it on March 2. But this time, the hiatus will be longer as Congress is not scheduled to reconvene until April 12. At that time, lawmakers are expected to renew the NFIP retroactively. 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.

On March 29, FEMA issued a bulletin with two sets of Frequently Asked Questions about the program's hiatus: a consumer-oriented version and a more technical version. Tou can access the FEMA memo and FAQs here.

Also, FEMA issued this guidance bulletin on Friday afternoon March 26. In this memo, FEMA advises that as a result of the expiration, "the Program will not be allowed to operate and you are to be guided by Bulletin W-09068, issued October 27, 2009, and titled 'Recommendations/Guidance for Possible NFIP Authority Lapse and Hiatus.' Click here to access the FEMA memo issued Oct. 2009.  

In addition, PIA National issued practice guidelines for agencies following a previous NFIP hiatus. We suggest you also review this memo now.

PIA National Overview and Practice Suggestions (10/28/09)

PIA National has also issued a press release expressing disappointment with Congress' failure to reauthorize the flood insurance program. In it we point out that contrary to any impression, the NFIP is not an entitlement program. It is funded by the premium dollars. We also take Congress to task for letting the program lapse.

"We've just experienced one of the most severe winters in our nation's history and we are now headed into the spring flooding season," said PIA National President-elect Brian Marino, co-chair of the association's working group on natural catastrophes. "The snow is melting, the rivers are rising and Congress is leaving its constituents unprotected."


PIA Disappointed With Latest Lapse in NFIP (PIA 3/29/10)

Senate Adjourns Without Extending Flood Insurance (National Underwriter 3/26/10)

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