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PIA Urges Congress to Renew the National Flood Insurance Program Without Delay

WASHINGTON, February 5, 2009 - Congress needs to act now to renew or extend the National Flood Insurance Program (NFIP) to avoid a...
February 5, 2009

Insurance Agents Warn Against Potential Lapse in Coverage

WASHINGTON, February 5, 2009  - Congress needs to act now to renew or extend the National Flood Insurance Program (NFIP) to avoid a lapse in coverage for millions of homeowners, according to the National Association of Professional Insurance Agents (PIA).

Authorization of the flood insurance program is set to expire on March 6, 2009. PIA members are writing members of Congress to urge them to renew the authorization for the program before the expiration date, even if legislation to enact needed reforms to it is not yet complete. Currently, renewal of the flood insurance program is part of comprehensive reform legislation pending in Congress.

"We're getting down to the wire here," said Brian Marino, co-chair of the PIA National Natural Catastrophe Working Group. "Getting the reforms right is important but with only about 30 days left before the deadline, PIA's principal concern is that there is no lapse in the flood insurance coverage that is critically important for homeowners and businesses."

While PIA's top concern right now is a gap in the program, PIA also supports reforms to improve the current system in order to protect consumers from future events. PIA outlines these reforms in its letter to Congress, including:

  • Continuation of single peril insurance and the ongoing exclusion of wind coverage.
  • Multi-year authorization of NFIP by Congress, in this case five years, in order to operate a balanced, consistent program.
  • Increase 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.
  • Coordinate 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.

"The NFIP provides an important service to people and communities that are affected by  flooding events," said Bill McGraw, co-chair of the PIA National Natural Catastrophe Working Group. "It has served property owners well since its inception in 1968. The private insurance industry has been almost entirely unwilling to underwrite flood insurance because of the catastrophic nature of these disasters. Therefore, the NFIP is the only way for people to protect against the loss of their homes or businesses."

"Congress should move without delay to reauthorize the program, while also keeping the reforms on a fast track," he added.

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.

PIA Letter to Congress Regarding NFIP Reauthorization (PDF file)

 

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