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    Personal Insurance Blog

    National Flood Insurance Program (NFIP) Reauthorized through November 13, 2018

    Posted by Antonia Clifford

    Wed, Aug 01, 2018 @ 02:45 PM

    Senate has approved an extension of the National Flood Insurance Program, ensuring it will be operational through November 20, 2018.  All the Program rules and regulations will remain in force and unchanged, and all transactions will continue to be processed.

     

    Flood 080118

    If the Senate had not acted, the NFIP would have expired on July 31st.  The final vote was 86-12 in favor of keeping it authorized an additional four months.  

    To discuss your Flood Policy in particular or the Program in general, call the Gordon Atlantic Insurance professionals toll free at 1-800-649-3252.  Prefer to type versus talk?  Use the form to the left of this blog.

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    Tags: national flood program, Flood, nfip, flood insurance

    2018 Government Shutdown and NFIP (Flood insurance)

    Posted by Stephanie O'Neill

    Mon, Jan 22, 2018 @ 02:57 PM

    Homeowners that are required to have a flood policy with the National Flood Insurance Program (NFIP) may be affected by the current government shutdown that began on January 20, 2018 depending on when your policy - or a pending closing - is effective.

    If your flood policy renewed prior to the expiration of the program (December 23rd) and you have paid your renewal, then your policy remains in force. Those who did not pay their renewal premium before or within the 30-day grace period may run the risk of not having coverage, loss of grandfathering and other penalties.

    If you are purchasing a new house or property within a flood zone, you'll need a flood policy.

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     If you have a sale pending, the application and payment must have been received and dated before the flood program expired (January 20) for the policy to be issued. This is also the case for closing dates after January 20th.

    However, if you have a pending closing and have not submitted the application and payment, your closing will probably be delayed until the government re-authorizes the National Flood Insurance Program, or unless you choose a private flood insurance carrier such as offered at Gordon Atlantic Insurance.  See our article on private flood insurance options here.

    How will claims be handled? Policies that are in force before midnight of the last effective day of authorization will remain in force until their expiration date and claims under those policies will be processed and paid as usual. Claims for covered losses occurring during a lapse, on existing policies and on policies in force after the last effective day of authorization, are to be processed and paid as usual.

    FEMA will notify NFIP stakeholders when the program has been reauthorized.  Naturally if we can help with NFIP placement or with a private policy, just contact us.

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    Tags: national flood program, Flood, nfip, flood insurance

    Congress Extends National Flood Insurance Program to Spring 2012

    Posted by Geoffrey Gordon

    Wed, Dec 28, 2011 @ 02:56 PM

    Cover your home with homeowners from Andrew Gordon Inc Inusrance Norwell MAPresident Obama signed a bill authorizing the continuation of the National Flood Insurance Program (NFIP) on December 23 extending the program to May 31, 2012. This was the sixth last minute extension of the program in the past year and a half, though Congress has worked hard over the past year to pass a 5-year extension with several structural changes.

    The NFIP has been around for decades and today is the primary vehicle for providing insurance for about 5.5 million property owners around the country.  Locally, many homes in eastern and southern Massachusetts are insured by or have been rebuilt with NFIP insurance.

    In July, the House overwhelmingly passed a bill (HR 1309) that would have made fundamental changes to the program that provides flood insurance to businesses and families around the country. Proposed changes included a gradual path to removing taxpayer subsidies, and put the program on a sustainable footing. But these changes met resistance in the Senate, where the bill died.

    The existing program is in trouble. A lingering debt of $18 billion remains on the books from 2005; and big spring rains or a 2012 hurricane could increase that shortfall without notice. 

    Conceptually the National Flood Insurance Program makes sense: private insurers don’t want to insure against geographically concentrated losses because of an insurance concept known as ‘spread of risk’. The national government can withstand concentrated losses by spreading risks across the entire country. The problem is that the current rates are not developed with the same detail as private insurers do when trying to make a profit.  As an example, in 2006, the year after over $17 billion in losses from Hurricane Katrina, average NFIP rates actually went down.

    Subsidized pricing also leads to a problem known as ‘adverse selection’: flood insurance is a great deal if you’re really near the water; it’s not a great deal if you’re only mildly exposed to flood waters. Pressure from interest groups such as builders, developers, realtors and property owners delivers a political angle that prefers the status quo.  However these groups also generally agree that continued temporary extensions can be disruptive as well. State Farm, one of the country’s largest providers for homeowners insurance, dropped out of participation in NFIP in June 2010 in large part due to frustration over frequent temporary extensions.

    We were optimistic for long term sustainability over the summer when the House passed its 5-year bill, but are less optimistic today. Congress has been unable to develop a program acceptable to both the House and the Senate over the past year in spite of its structural problems.  We believe now that the program will continue with temporary extensions and without change until after November 2012 elections, or until after the next big hurricane or other flooding disaster puts the program deeper in debt. Given the extension until May 31, we can be grateful that home closings won’t be delayed by the absence of insurance, at least until then. 

    Learn more about homeowners insurance here.

      INSURANCE QUESTION? Home Quote Request
    Geoff Gordon

    Politics trumps Economics as Congress extends National Flood Insurance Program to Spring 2012 without Changes

    Tags: home, insurance, adverse selection, national flood program, homeowners, flooding, Flood, nfip

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