Multiperil Coverage May be Added to NFIP

04/23/2010

Consumers seeking to buy property in a flood plain or coastal area may be required to buy more than just traditional home insurance coverage.

Flood insurance may be purchased through the Federal Emergency Management Agency's National Flood Insurance Program. Plans purchased through the program come with a 30-day waiting period. The legislation was recently extended through the end of 2010 - and prepared for further reform.

One adjustment proposed by U.S. Senator Gene Taylor would add windstorm coverage to the program. This type of insurance is currently available through the private market, and would be very costly for the NFIP and consumers, according to a recent release from the National Association of Mutual Insurance Companies.

"It would add an enormous financial risk to a program that is almost $20 billion in debt, and could ultimately lead to taxpayers providing subsidized coverage to homeowners in high-risk coastal areas," said Kathy Mitchell, federal affairs director for NAMIC.

About 49 percent of homeowners currently have coverage through the NFIP, according to the Insurance Information Institute, with almost all of these individuals living in flood-risk areas.

ShareThis