Member News

The following is a message AFIE received from our flood insurance carrier, Fidelity National Insurance Company on June 21, 2010.

Senate Vote Keeps NFIP Waiting

Hopes the insurance industry had of politicians putting disagreements aside to reauthorize the National Flood Insurance Program (NFIP) were dashed on June 16 th in Washington, as the Senate voted against legislation to restart the program.

The NFIP expired May 31, marking the third lapse of the program this year.

Industry trade organizations said politicians are scrabbling over certain provisions in the bill unrelated to the NFIP.

These provisions in the “tax extenders bill” would allegedly add to the federal deficit, those against the measure claim.

“We cannot afford to have political disagreements get in the way of protecting millions of Americans from flood losses,” said Jimi Grande, senior vice president of federal and political affairs for the National Association of Mutual Insurance Companies. “The lack of action by Congress is unacceptable.”

Complicating matters is the fact hurricane season began June 1 and an active season is forecasted. The only way for homeowners to get flood insurance is through NFIP, but right now no NFIP policies can be written or renewed, which also prevents real estate closings from occurring if a property is in a floodplain.

The program protects about 5.5 million homeowners.

“If nothing else, we have to immediately address the coastal homeowners who are preparing for the hurricane season now,” said Ben McKay, senior vice president of federal government relations for the Property Casualty Insurers Association of America.

Even if the bill was passed, NFIP policies would not be active until mid-July because of a current 30-day waiting period from when a policy is bought, insurance representatives said.

During the NFIP hiatus:

· Submission of flood policy quotes, applications and premium payments will continue to be accepted via www.fidelityonline.com with policy effective dates adjusted based on the eventual NFIP reauthorization.

· Applications and premium payments must be received prior to the May 31, 2010 deadline to be made effective during the lapse. Electronic premium payment methods are available to policyholders at www.fidelityonline.com .

· Claim payments will be continued as usual for policies currently in effect. Fidelity National Flood will follow all guidelines in accordance with the FEMA Bulletin W-09068, issued October 27, 2009, and titled “Recommendations/Guidance for Possible NFIP Authority Lapse and Hiatus” available at: http://bsa.nfipstat.com/wyobull/w-09068.pdf .

Armed Forces Insurance writes flood insurance through Fidelity National Property and Casualty Insurance Group, which is the largest provider of NFIP flood policies in the U.S. The National Flood Insurance Program (NFIP), a component of FEMA, provides flood insurance in more than 20,000 communities across the United States.

Please contact AFI's flood insurance department at 800-524-9329 with any questions.