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Flood Insurance Program to Expire Again

As insurance and real estate agents and homeowners feared, Congress left Washington on March 26 without extending the National Flood Insurance Program (NFIP). Congress adjourned...
March 26, 2010

As insurance and real estate agents and homeowners feared, Congress left Washington on March 26 without extending the National Flood Insurance Program (NFIP). Congress adjourned until April 12 after failing to agree on an unemployment benefits bill that included a provision with an extension of the NFIP.

As a result, the federal flood insurance program's authority to write new policies ends on Sunday, March 28 at midnight. After that time, insurance agents will not be able to provide new or renewal flood insurance policies, which are required by lenders to close on some real estate sales.

A similar hiatus occurred at the end of February and the NFIP was closed for several days until Congress renewed it on March 2. But this time the hiatus will be longer, as Congress is not scheduled to re-convene until April 12. At that time, Congress could renew 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.

The NFIP has issued this guidance bulletin on Friday afternoon March 26.

In the memo, FEMA advises that once the deadline passes, "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 memo.

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