NFIP Lapses for Fourth Time in a Year

06/05/2010

The National Flood Insurance lapsed for its fourth time in a year when Congress took its Memorial Day holiday without extending coverage.

Bills extending the Federal Emergency Management Agency's program have already been introduced in the Senate and House of Representatives, according to a recent report by the Insurance Journal. These will not be taken up in discussion, however, until June 7 at the earliest.

The lapse may make it difficult for many homebuyers to purchase properties located in coastal regions or near flood plains.

"The series of temporary extensions, last-minute actions and service lapses during such a delicate period in the American economy is troubling to agents, homeowners and small businesses," Charles Symington, senior vice president of government affairs from the Independent Insurance Agents and Brokers of America, told the Insurance Journal.

Policies purchased through the program protect against the water damage not covered by many homeowners insurance policies. They also come with a 30-day waiting period. The recent NFIP lapse comes at the beginning of what many forecasters expect to be a very active hurricane season, according to the report.

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