Flood Insureds Left High And Dry

Who would have thought that when the lame duck Congress finallyleft Washington for good this year, they would have providedterrorism insurance, but not flood coverage?

Sure enough, the U.S. House of Representatives adjourned for theyear after failing to vote to extend the National Flood InsuranceProgram–a development that a top official at the IndependentInsurance Agents & Brokers of America warned “could bring thereal estate market to a grinding halt.”

That was the reaction of Justin Roth, director of governmentaffairs for the Alexandria, Va.-based IIABA, after an extension ofthe National Flood Insurance Program, set to expire Dec. 31, wasnot included as part of a continuing resolution passed by theHouse. Earlier, the Senate had approved an extension.

“I'm hopeful that Congress will make this their first prioritywhen they return from recess,” Mr. Roth said.

This is no small oversight. The NFIP, created by Congress in1968, offers coverage to nearly 20,000 communities across theUnited States and its territories.

Perhaps the new Congress will get around to extending theprogram quickly, and a major crisis will be avoided. But in themeantime people in flood-prone communities are left in the lurchfor at least the first week of the year, and perhaps beyond.

We were relieved that Congress finally got around to putting afederal terrorism reinsurance mechanism in place, but we arechagrined that flood insurance was left to expire, if onlytemporarily. It makes no sense to jerk around those who depend on akey program that is destined to be extended anyway.

Agents should do their part and keep the heat on the newCongress to act fast after they convene to restore this vitalcoverage. In the meantime, keep your fingers crossed there are nofloods between Jan. 1 and whenever Congress gets around to takingcare of business.

Reproduced from National Underwriter Property &Casualty/Risk & Benefits Management Edition, December 8, 2002.Copyright 2002 by The National Underwriter Company in the serialpublication. All rights reserved.Copyright in this article as anindependent work may be held by the author.