NFIP Extension may Stall Again

03/25/2010

The National Flood Insurance Program briefly lapsed recently after senators failed to approve its extension.

During this lapse, the NFIP, which is operated by the Federal Emergency Management Agency, was not able to renew or issue policies. The bill including its extension - along with unemployment benefits and COBRA subsidies - was delayed by Senator Jim Bunning, who cited unclear funding for job insurance benefits. It eventually passed on March 2.

The program will soon expire again, at midnight on March 28. A further extension is currently tied to a bill including COBRA subsidies and unemployment benefits and would carry the program through December 31, 2010. Some fear that its passage will be stalled by politics, according to a recent report by the Insurance Journal.

"We still believe the extension will pass, but given recent history I think it's always a good idea for agents and brokers to be prepared for a hiatus," Matt Brady, spokesman for the National Association of Mutual Insurance Companies, was quoted as saying.

Coverage provided through NFIP comes with a 30-day waiting period. Failure to pass the extension could result in significant delays, as Congress is slated to take a recess next week.

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