FEMA Acts To Protect Flood Insurance Policyholders
Release Date: September 20, 2000
Release Number: HQ-00-124
WASHINGTON, D.C. -- The Federal Emergency Management Agency (FEMA) official who manages the agency's National Flood Insurance Program (NFIP) announced today that she has issued a temporary rule change that will allow certain policyholders extra time to renew their policies without fear of their flood insurance coverage lapsing because of overdue payment.
Federal Insurance Administrator Jo Ann Howard said, "I want to throw a safety net under repetitive-loss policyholders who may receive a delayed policy renewal notice and therefore, through no fault of their own, would be late in remitting their renewal premiums."
In recent years, FEMA has become concerned about a portion of the properties insured under the NFIP that suffer repeated flood damage---most of them older structures that were built before the community was aware of its flood hazards. As a result, FEMA has developed a special Repetitive Loss Program (RLP) identifying those properties that have suffered multiple losses and targeting them for FEMA-sponsored mitigation actions to reduce the risk of future flood damage.
Due to some initial data-processing problems with the RLP, flood insurance policy renewal notices could not be mailed on time to some of these property owners. Normally, NFIP renewal notices are sent to policyholders 45 days prior to the policy expiration date, and policyholders are allowed an additional 30 days following the expiration date to renew the policy without any break in coverage.
However, since some of these policyholder have received or will be receiving their renewal notices late, Howard said that for the period beginning August 1, 2000 through July 31, 2001, the 75-day renewal period will start from the date the renewal notice was mailed, even if this date is less than 45 days before the expiration date. She pointed out that under this limited change, those policyholders will be guaranteed a full 75 days to renew their insurance with no break in coverage.
"This change should protect any NFIP policyholder inadvertently caught up in this situation," Howard said. "Although this number should be small, the protection of every policyholder is important to us."
Under the NFIP, federally backed flood insurance is made available to homeowners, renters and small business owners in communities that adopt and enforce floodplain management ordinances to reduce future flood losses by regulating new construction. Currently, more than 4.2 million flood insurance policies are in force in more than 19,000 communities nationwide, representing approximately $532 billion worth of coverage.
Last Modified: Monday, 29-Dec-2003 14:59:06