Today, Congress reauthorized the National Flood Insurance Program that expired last Sunday night when Congress failed to pass a temporary extension of the program. The reauthorization is not retroactive. The expiration did not affect existing coverage. However, for the two days period, the NFIP did not issue new policies or renew policies; some may have sustained a lapse in coverage. Some home sales were even delayed because some lenders require flood insurance as a term of the mortgage.
The National Flood Insurance Act of 1968 provided insurance against inundation from rising waters or the overflow of streams, rivers, or other bodies of water, or tidal surges, abnormally high tidal water, tidal waves, tsunamis, hurricanes, or other severe storms or deluge.
The reauthorization extended the NFIP through March 28, 2010. Congress has extended the existing program several times while working on various proposals to reform the entire system. There are several pending overhaul bills in both the House and Senate. Some of the reform bills seek to expand the flood program to include wind coverage. The National Association of Insurance Commissioners has even promoted the idea of offering coverage for all catastrophic perils.
In the meantime, the NFIP only applies to flood. The NFIP has just released its May 2010 Revision to the Flood Manual as well as Wind vs. Water Adjusting Practices.
NAIC’s Proposal For Creating A Comprehensive National Plan To Address Catastrophic Risks
National Flood Insurance Act of 1968 and Flood Disaster Protection Act of 1973, As Amended