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PIA Applauds Extension of National Flood Insurance Program

WASHINGTON, February 26, 2009 - The National Association of Professional Insurance Agents (PIA) applauds the decision by the U.S. House of Representatives to...
February 26, 2009

Extension Will Protect Consumers While Reforms Are Considered

WASHINGTON, February 26, 2009  - The National Association of Professional Insurance Agents (PIA) applauds the decision by the U.S. House of Representatives to extend the National Flood Insurance Program (NFIP) through September 2009, under the omnibus spending bill passed February 25 in the U.S. House of Representatives. The Senate is expected to consider the extension before March 6.

"This extension means that property owners across the country who need flood insurance coverage will continue to be able to obtain it while the NFIP reform process proceeds," said  Bill McGraw, co-chair of the PIA National Natural Catastrophe Working Group. "We applaud the House for approving this vital flood insurance extension and encourage the Senate to do so as well." PIA conducted a grassroots campaign in support of the extension.

Authorization of the flood insurance program had previously been extended until March 6, 2009. The latest extension is through the end of the current fiscal year.

PIA supports reforms to improve the NFIP, including:

  • Continuation of single-peril insurance and the ongoing exclusion of wind coverage. Currently, only flood insurance is covered by the NFIP, while wind insurance is covered under homeowner's insurance and statewide wind pools. PIA is concerned that adding wind to the NFIP would cause confusion and could be viewed as an attempt to get Congress to pay for wind damage connected to hurricanes that may currently be a legal obligation under the current wind damage terms of property policies.
  • Multi-year authorization of NFIP by Congress, in this case five years, in order to operate a balanced, consistent program.
  • An increase in insurance maximum limits for all classes of insurable property, including building and contents coverage. At this time, less real dollar coverage is provided than in the past, since current limits have not been adjusted for inflation since 1968.
  • Coordination of flood coverage for commercial policies in the area of business interruption insurance (BII). BII is now only available in the private sector property market on a "covered peril" basis; flood is not a "covered peril." Thus, businesses affected by Hurricanes Katrina and Rita were not covered for ongoing business needs and costs in the aftermath of these storms.
  • Ongoing modernization of flood maps. The terrain of the United States is constantly changing. Therefore, a map modernization program must have ongoing funding.

"Much work remains to be done in order to improve the NFIP for the benefit of consumers," said Brian Marino, co-chair of the PIA National Natural Catastrophe Working Group. "Local communities, the states and the federal government all have a stake in making the flood insurance program work better for property owners and our nation's economy. PIA will continue to work with the key members of Congress tasked with addressing NFIP reforms."

Founded in 1931, PIA is a national trade association that represents member insurance agents and their employees who sell and service all kinds of insurance, but specialize in coverage of automobiles, homes and businesses. PIA members are Local Agents Serving Main Street America(SM). PIA's web address is www.pianet.com.

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