Tempers are flaring once again over yet another authorization lapse in the National Flood Insurance Program, or NFIP, which Congress allowed to expire at midnight on May 31st. Lawmakers are not expected to address an extension before June 7 at the earliest, leaving frustrated homebuyers, home sellers, Realtors and insurance agents unable to obtain coverage to close their sales.
The vitriol has cranked up a notch, due in part to the struggling housing market and a false spring that saw the House Financial Services Committee greenlight the Flood Insurance Reform Priorities Act . If passed, the act would authorize NFIP for five years and nudge the troubled program toward a more sustainable future.
Oh yes, there's also that nagging detail of hurricane season, which started simultaneously with the latest lapse in flood insurance. Just imagine the TV ads: NFIP -- not there when you need it.
Insurance Journal noted this response from Kathy Mitchell, federal affairs director of the National Association of Mutual Insurance Companies, or NAMIC: "Once again, the NFIP has become a victim of politics that have nothing to do with the program itself. Allowing the NFIP to lapse just as the 2010 storm season is beginning shows a troubling lack of judgment on the part of Congress."
Robert Rusbuldt, president and CEO of the Independent Insurance Agents & Brokers of America, or IIABA, aka the "Big I," was equally blunt: "Lapses in this program cause confusion and leave many homeowners and small businesses unprotected during a very dangerous time. The Big 'I' is also concerned that the uncertainty of temporary extensions and the numerous lapses that have already occurred in the last few months will negatively impact the market."
Critics blame the latest lapse on widespread election-year stasis and a general miasma surrounding controversial but unrelated reform measures.
What do you think? Is Congress playing games with the flood insurance program? Have you had a home sale or purchase derailed while the flood program languished in limbo?