As Florida homeowners track arguments between the state and Citizens Property Insurance Co. over sinkhole coverage, they are keeping an eye on Washington. Last week, the National Flood Insurance Program was granted a reprieve -- its second since the program officially expired in September. This extension will last another few weeks, at which point debates over coverage for wind and water damage will likely be postponed until 2012.
Within days of its Sept. 30, 2010 deadline, Congress extended the program for a year. Most lawmakers believed at the time that the House and Senate would act on at least a few of the many proposals to revise the program. The session didn't quite work out that way.
By the time the Sept. 30, 2011 expiration date came around, any questions of reforms were long forgotten. The only issue to consider was how long the extension should last. The bills proposing changes to the program have been stalled since July.
Insurance companies aren't likely to give up, though. The seemingly endless six-week extensions may only be adding fuel to their reform fire. The National Assn. of Mutual Insurance Cos. said in a statement that the House has acted but the Senate has not. The bill would be approved in the Senate, though, "if they'd only vote on it."
NFIP currently serves more than 5.6 million policyholders; in 2010, the program covered about $727,000 in losses, much lower than the 2005 high of $17,714,793. Insurers and homeowners alike are concerned about the effect of this year's record floods.
Source: Business Insurance, "NFIP extended through Dec. 16; insurers call for long-term extension," Mark A. Hofmann, Nov. 18, 2011