National Flood Insurance Extension Introduced

The National Flood Insurance Program (NFIP) was set to expire in September 2009. The expiration would have resulted in businesses across the country being unable to afford flood insurance protection.

Last week, Financial Services Housing Subcommittee Chairwoman Maxine Waters and Committee Chairman Barney Frank introduced H.R. 3139, to authorize the NFIP through March 31, 2010. In addition, legislation was introduced to reform the NFIP. "This program is very important and very much in need of revision" according to Congressman Frank. "Passing an extension of the act will prevent any gap in the important work it does while giving us the chance to improve it both from the economic and environmental perspectives."

Commercial property policies DO NOT cover flooding and flood related damage. A business owner must purchase flood insurance in addition to a commercial property policy in order to protect the business against the risk of flood. The NFIP is designed to assist home owners and business owners in securing flood insurance as it is often difficult or prohibitively expensive to secure the insurance.

The Independent Insurance Agents and Brokers of America have come out in support of passage of the extension. “The Big ‘I’ strongly believes that homeowners and businesses need both higher coverage limits and business interruption insurance in order to properly insure their property. We hope that as Congress considers a long term reauthorization soon, they will include these reforms in legislation. We look forward to working with the Obama administration and Congress for a more permanent solution."

If you are a business owner relying on the NFIP, consider contacting your representatives to make them aware of the need to extend and reform this critical legislation.