PIA Applauds Extension of National Flood Insurance Program
WASHINGTON, July 1, 2010 - The National Association of Professional Insurance Agents (PIA) applauds the action taken by Congress to reauthorize the National Flood Insurance Program (NFIP). On June 30, the U.S. Senate approved the National Flood Insurance Program Extension Act of 2010 (H.R. 5569), reauthorizing the flood insurance program through September 30, 2010. The House of Representatives passed the extension on June 23.
"This is yet another short term fix, as Congress has once again kicked the can down the road to September 30, 2010," said PIA National President-elect Brian Marino, co-chair of the association's working group on natural catastrophes. "Although we greatly appreciate the short term extension, Congress has failed to extend the program through the Atlantic hurricane season. With our economy in peril, we cannot have closings held in limbo. The real estate market has again suffered due to this needless lapse in coverage."
"Congress needs to be aware that this program is not an entitlement program and should be handled as a stand-alone bill," Marino said. "For the past year, Congress has chosen to wrap the controversial extension of unemployment benefits into the flood bill, which clearly has widespread support. We need to take the politics out of the program."
The National Association of Realtors estimated that 1,400 sales were delayed each day that the flood insurance program was in hiatus. While some lenders have been willing to accept binders, or promises, to write flood insurance policies as soon as Congress reauthorized the program, others refused to allow deals to go through without the insurance. While no new policies could be issued during the lapse in NFIP authorization, consumers with current flood insurance policies remained covered. Claims payments were not affected.
PIA supports the Flood Insurance Reform Priorities Act of 2010 (H.R. 5114), which was passed by the House Financial Services Committee on May 26. It would reauthorize the program for five years and make other reforms, including increasing NFIP coverage limits, phasing in actuarial property rates and phasing out premium subsidies for second and vacation homes and making business interruption and additional living expense coverages available at actuarial cost. H.R. 5114 has yet to pass the full House or advance in the Senate. PIA opposes adding wind coverage to the NFIP and supports forgiveness of the $20 billion debt that the program incurred in 2005 as the result of Hurricane Katrina.
"The NFIP has become the victim of an increasingly political atmosphere in recent months and years," said Rita Hollada, past chairman and currently PIA National's representative to the Flood Insurance Producers National Committee (FIPNC). "The repeated lapses in the program and its manipulation by Congress affect the certainty of the NFIP as a viable insurance program whose sole purpose is to protect and fund recovery for flood damage."
"Lenders, companies and insurance agents have become increasingly frustrated with the current Congressional attitude and tactics," Hollada said.
Founded in 1931, PIA is a national trade association that represents member insurance agents and their employees who sell and service all kinds of insurance, but specialize in coverage of automobiles, homes and businesses. PIA members are Local Agents Serving Main Street America (SM). PIA's web address is www.pianet.com.