Insurance Blog

With forecasters predicting a very active Atlantic hurricane season, it’s timely that a long-term extension to the National Flood Insurance Program (NFIP) is up for debate on the House floor today.
HR 5114, the Flood Insurance Reform and Priorities Act of 2010, sponsored by Rep. Maxine Waters (D-CA) would reauthorize the NFIP through 2015.
The Property Casualty Insurers Association of America (PCI) notes that this year alone, Congress has allowed the NFIP to lapse three times.
During these lapses, new flood insurance policies could not be written, leaving homeowners vulnerable and delaying thousands of real estate transactions per day in flood-prone regions.
The latest extension, signed into law by President Obama just a few weeks ago extends the program through September 30.
As the debate continues on how to secure the long-term future of the NFIP, here’s a look at the program by some of the numbers (sourced from I.I.I. facts and stats, and the […]

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President Obama Friday signed into law a measure that extends the National Flood Insurance Program (NFIP) through September 30.
The NFIP expired at midnight on May 31 – in time for the start of the Atlantic hurricane season – after Congress failed to act on legislation reauthorizing the program.
The latest extension is retroactive, so flood damage claims filed after May 31 will be covered by the program.
The National Association of Mutual Insurance Companies (NAMIC) makes the important point that hurricane season runs two months beyond the new September 30 expiration date. A press release quotes Jim Grande, NAMIC senior vice president of federal and political affairs, saying:
Congress must not let the program lapse again, but that’s just the minimum. The best thing they can do is take this time to pass legislation that would implement common sense reforms and help the NFIP make the first steps towards financial soundness.”

Check out I.I.I. […]

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The Federal Emergency Management Agency (FEMA) has confirmed that National Flood Insurance Program (NFIP) policies will cover property damage caused by oil in flood waters in the event of a defined flood.
The clarification comes after rising concerns over whether flood insurance policies would cover damage to homes and businesses if oil from the Deepwater Horizon spill mixes with flood waters, comes ashore during a storm and causes pollution damage to buildings.
In a memorandum to Write-Your-Own (WYO) flood program insurer participants, James Sadler, director of claims at the NFIP, said:
“Oil in flood water is not new for the NFIP, especially in riverine flooding. In the past, the mixing of oil and other pollutants in flood waters resulted from damage caused by a storm.”

FEMA states that there must first be a defined flood as described in the Standard Flood Insurance Policy (SFIP) and that damage caused by the oil in flood waters […]

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Insurance Journal reports that the National Flood Insurance Program (NFIP), which expired at midnight on May 31 after Congress failed to act on legislation reauthorizing the program, is not expected to be able to issue new policies for a week or longer.
This is the fourth time in recent months that the program has been allowed to lapse. The hiatus means that the NFIP is not authorized to sell new policies, issue increased coverage on existing policies, or issue renewal policies.
However, NFIP policies that are in force will remain in force and claims under those policies can continue to be paid after May 31.
Allowing the NFIP to lapse at the start of the 2010 hurricane season is irresponsible, according to the National Association of Mutual Insurance Companies (NAMIC). In a press release, NAMIC federal affairs director Kathy Mitchell said:
Millions of homeowners and businesses will be left vulnerable to storm losses because […]

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Massive storms that struck Tennessee and northern Mississippi the weekend of May 1-2 left death and destruction in their wake. In Nashville, more than 13 inches of rain fell during the two-day period, and the Cumberland River crested at 51.86 feet, a level not seen since 1937. There have been 23 confirmed fatalities in Tennessee alone. Claims Magazine reports that the city of Nashville expects damage from the flooding to surpass the billion dollar mark. It cites a press release from Nashvillle Mayor Karl Dean that the city has identified over $1.56 billion in property damage throughout Davidson County. The damage figures include only building damage and not personal property or infrastructure damage. Currently, there are no estimates for damage insured by the National Flood Insurance Program (NFIP). I.I.I. flood insurance facts and stats show there were 25,501 flood policies in force in Tennessee  in 2008 for a total of $4.9 billion […]

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Legislative proposals to reform the National Flood Insurance Program (NFIP) were once again up for debate at a hearing before the U.S. House Financial Services Subcommittee on Housing and Community Opportunity yesterday. The NFIP recently was granted another temporary extension until May 31. The renewal is retroactive to March 28, covering the more than two-week period (March 28-April 15) when Congressional inaction effectively allowed the program to lapse. In testimony at yesterday’s hearing, Orice Williams Brown, of the Government Accountability Office (GAO) noted that the NFIP is not actuarially sound. Key points made by GAO are:

While NFIP’s financial condition has improved slightly due to an increase in the number of policyholders and moderate flood losses, it is unlikely to pay off its full $18.8 billion debt, especially if it faces catastrophic loss years.
Many property owners are paying premium rates that do not reflect the full, long-term risk of flooding. Almost […]

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A post on The Hill’s finance and economy blog says Congress intends to retroactively fund the National Flood Insurance Program (NFIP), after the Senate adjourned Friday until April 12 without passing a measure that would have extended the program beyond its Sunday expiration date. This is the third time in recent months that the NFIP has been allowed to lapse. A report at ifawebnews.com quotes National Association of Mutual Insurance Companies (NAMIC) spokesman Matt Brady saying that coverage will remain in place for those who have protection through the NFIP, but that there is a serious impact on those looking to close a home sale in flood-prone areas. The NFIP provides guidance here on operating during a hiatus. Check out a March 26 National Underwriter article for more on this story. The National Oceanic and Atmospheric Administration’s (NOAA) National Weather Service recently warned that more than one-third of the U.S. faces a high or […]

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Insurance Networking News reports that another reprieve for the National Flood Insurance Program (NFIP) is in question after yet another temporary extension to the program was dropped from a jobs bill advancing in the Senate. The development comes less than two weeks before the NFIP is set to expire.  The Hiring Incentives to Restore Employment Act would have extended the NFIP until May 31, but this option was dropped as Senate Majority Leader Harry Reid sought to trim the $85 billion legislation to a more politically viable $15 billion package, INN reports. The most recent extension for the program to February 28 came as part of the 2010 Defense Appropriations Bill passed by the Senate in December 2009. Speaking of flood insurance, as the snow melts and looking ahead to springtime showers, now is a good time to purchase an NFIP policy given the 30-day waiting period before flood insurance […]

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With all eyes focused on passage of healthcare reform legislation, it’s good to see that a short term extension of the National Flood Insurance Program (NFIP) was passed by the Senate in the 2010 Defense Appropriations Bill over the weekend, albeit for just another two months. The program is now set to expire on February 28, 2010. The move keeping the NFIP in place was applauded by the advocacy trades, but they cautioned that a longer term solution will be required to address the program’s financial troubles. In a statement, the Property Casualty Insurers Association of America (PCI) said it looks forward to working with the House and Senate in 2010 to advocate a long-term extension ensuring the program’s fiscal soundness that protects homeowners. Similarly, the National Association of Mutual Insurance Companies (NAMIC) called on members of Congress to use the latest short term extension to complete reforms to the […]

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In case you missed the news, funding for the National Flood Insurance Program (NFIP) which was set to expire on September 30, 2009, has been extended once again by Congress until December 18, 2009. This is the latest in a series of temporary extensions for the program approved by the House and Senate as part of an appropriations bill for the Department of the Interior. An overhaul of the 41-year-old program is currently taking back seat to healthcare reform and other major legislation on Capitol Hill. Ever since Hurricane Katrina in 2005, there has been debate over how to improve the NFIP. Significant property damage caused by storm surge from Hurricane Ike in 2008, has fuelled that debate. Flooding related to hurricanes Katrina, Rita and Wilma in 2005 led to loss payments of $17.6 billion under the program. At the end of 2008, the NFIP had some 5.7 million policies […]

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