National Flood Insurance Program set to expire in less than a month

The National Flood Insurance Program, or "NFIP," is a program of the Federal Emergency Management Agency ("FEMA") that issues standard flood insurance policies, mostly through private insurers.

Originally set to expire last fall, on October 1, 2008 President Bush signed legislation that extended the program until March 6, 2009. That was a compromise bill as the House and Senate were unable to agree on certain provisions. The House version included windstorm coverage, and President Bush had said he would veto the bill for that reason. The Senate version would have forgiven $17.5 billion that NFIP borrowed in recent years as a result of increased damages from hurricanes.

I called FEMA to find out whether we can expect Congress to further extend the program and, if so, with what changes. Ed Pasterick, a Senior Policy Advisor at FEMA, stated that thus far Congress is not actively considering the issue. He expects that the program as it currently stands will be again extended until the end of September, 2009. He stated that FEMA itself is not interested in including windstorm coverage in the program.

In a future post, assuming that NFIP is extended, I'll discuss how NFIP insurance differs from other types of insurance.