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Insurance problems and cures

National Flood Insurance Program lapses

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Hard to believe, but Congress let the NFIP lapse. It goes out 2/28/10 (Sunday) and our elected reps won’t take action by then.
This means the insurance companies which service the business can not issue new policies OR RENEWALS, or increase limits. Here’s a quote from Travelers insurance (they do try to be professional but this is astonishing with New Jersey insurance purchasers and the Northeast in general sitting in snow with Spring thaw coming):

“Therefore, we are now faced with at least a short-term lapse in statutory authority to issue or renew flood insurance policies pursuant to the NFIP. Based on past experience, this lapse means that we are unable to issue any new or renewal flood policies, or make coverage changes on existing flood policies.

FEMA has advised us to pend premium transactions received after February 28, 2010, until, and if, Congress passes and President Obama signs a bill that re-authorizes the NFIP. New and renewal policies or coverage changes will go into effect at the earliest date, which is consistent with the receipt of premium and waiting period rules of the NFIP and the expected extension of authority for the NFIP. For applications made in connection with a mortgage loan, if the extension of the authority to issue flood insurance policies under the NFIP is granted retroactively, new policies will be issued effective as of the date of the loan closing. Additionally, if Congressional extension is granted retroactively, any claim for insurable losses suffered from the effective date for the policy term will be honored by the NFIP, even if the authority is granted after the date of such losses.

Please note that policies or coverage changes will only be effective if the extended authorization of the NFIP becomes law, which is expected. If Congressional extension is not granted within a reasonable period, premiums will be refunded. In this event THE REQUESTED COVERAGE WILL NOT BE PROVIDED and NO PROTECTION of flood insurance existed during this period.”


Written by gbwinsurance

February 26, 2010 at 6:24 pm

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