NU Online News Service

The official start date of the Atlantic hurricane season wasJune 1, but no flood policies have been issued or renewed becausethe National Flood Insurance Program has expired, said twoinsurance groups, calling for a long-term extension of theprogram.

The NFIP expired May 31, resulting in the third lapse in theability to purchase flood insurance coverage this year.

As a result, no NFIP policies can be issued or renewed untilCongress reauthorizes the program, and existing policyholderscannot increase their coverage limits during the program's hiatus,which is particularly troubling for those who may be impacted bythe Deepwater Horizon oil spill should a storm occur, the PropertyCasualty Insurers Association of America (PCI) said.

"It is time to put politics aside and reauthorize the floodinsurance program," said Ben McKay, senior vice president offederal government relations for the PCI. "We are now three weeksinto hurricane season and homeowners still cannot purchase floodinsurance."

The NFIP hiatus will also prevent real estate closings if aproperty is in a floodplain where coverage is mandated underfederally-backed mortgage requirements, PCI said.

"We need a long-term, sustainable solution to the floodprogram," McKay said. "But if nothing else, we have to immediatelyaddress the coastal homeowners who are preparing for hurricaneseason now."

The Independent Insurance Agents & Brokers of America lastweek sent a letter to the leadership of the United States Congressurging it "to immediately pass a reauthorization of the NFIP withretroactivity to June 1, 2010."

The association said it firmly believes that lapses in theprogram will cause confusion and leave many homeowners and smallbusinesses unprotected during a delicate economic period and at adangerous time of the year.

The IIABA letter said, "Congress has traditionally extended theprogram for five year periods in order to provide stability andsecurity for the marketplace. Unfortunately, Congress has recentlyonly extended the program for short periods, from 30 days to sixmonths. These short term extensions have occurred in order to allowCongress the opportunity to make needed reforms in order to bringstability to the program in the future."

The letter continued that while IIABA has strongly supportedSenate and House reform efforts, "we are concerned that this pushfor reform has now been underway for nearly four years, and duringthis time it has held up any consideration of a long termextension. Consequently, the program has been forced to go from oneshort term extension to the next.

"To make matters worse," the letter said, "in the last year eventhese short term extensions have been considered in conjunctionwith the extension of other programs such as unemploymentinsurance, COBRA subsidies and Medicare 'doc fixes.'

"While each of these programs may be important in their ownright, the undeniable reality is that they have political problemsthat have hindered their consideration, which in turn has hinderedthe consideration of the extensions of the NFIP."

PCI's McKay noted, "Even if a homeowner purchases a policytoday, they will not have flood protection until after the July 4holidays. There is a 30 day waiting period from when an NFIP policyis purchased until it goes into effect. Congress is wagering adangerous gamble."