NFIP May Receive 5-year Extension

04/28/2010

A bill recently approved by a congressional committee would protect the National Flood Insurance Program from lapses like those experienced earlier this spring.

The program is operated through the Federal Emergency Management Agency and offers protection against water damage, which is not usually covered in a traditional home insurance policy. NFIP endured brief lapses this spring when two bills aimed at its extension failed to pass in the Senate as a result of budgetary concerns.

The House of Representatives Financial Services Committee's proposal would extend the program, which is set to expire at the end of 2010, for five years, according to a recent report by the Insurance Journal.

"The focus on NFIP should be on providing coverage for those vulnerable to natural disasters, not to subsidize the wealthiest Americans, so we are phasing out premium subsidies for second homes and vacation homes, which will save the program a lot of money," U.S. Representative Maxine Waters said.

Senator Gene Taylor recently tried to add multiperil coverage to the NFIP, meaning that the program would also protect against damages from windstorms. Critics of this proposal have pointed to the financial burden that this would add to the programs.

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