Texas Flood Insurance hit a snag when the U.S. Senate adjourned for the Memorial Day recess without taking action to extend expiring provisions, including extension of the National Flood Insurance Program (NFIP).  This means that the program expired at midnight on May 31, 2010.

The Senate is not due to vote on the bill to extend the NFIP until at least Monday, June 7, 2010.  This means that there is a lapse in statutory authority to renew or issue or renew flood insurance policies based on flood insurance program guidelines.  This means that insurance companies 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 May 31, 2010, until, and if, Congress and President Obama pass and sign the bill that reauthorizes the NFIP.   For home insurance shoppers that need flood insurance because of a mortgage application, the Senate will have to grant authority retroactively in order to give customers coverage effective the date of closing.  Additionally, if Congressional extension is granted retroactively, any claim for flood insurance claims 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, insurance companies will refund insurance premiums.  In this event the requested coverage will not be provided and no protection of flood insurance existed during this period.

If you have any questions regarding this issue, please feel free to call Texas Insurance Pro at 214.717.4326.

For more information regarding flood insurance stay tuned to www.txinsurancepro.com.