Flood insurance up for renewal

BRADENTON — The insurance industry is on the edge of its seat waiting once again to see what will happen to the National Flood Insurance Program as it faces its fourth reauthorization this year.

The federal program that provides residential and commercial insurance coverage for flood damage is set to expire Sept. 30 and federal lawmakers have yet to reauthorize the program beyond that.

The House of Representatives in July approved a five-year extension for the National Flood Insurance Program. Now, industry officials are urging the Senate to agree to the long-term reauthorization to give the program more certainty for insurance writers and consumers.

“The House did what it’s supposed to do,” said Bob Fowinkle, of Moore, Fowinkle, Schroer Agency in Bradenton. “But the Senate sat on it for what reason I have no idea.”

Each time the federal government has to reauthorize the program, its policies or funding, a temporary suspension is put on writing and renewing flood policies.

As a result of the ongoing reauthorizations, which cause stops and starts in the flood coverage, insurance officials threaten to follow State Farm Fire and Casualty’s lead and drop their participation in the program.

“As a result of repeated lapses in coverage, consumers continue to face challenges when trying to secure coverage,” said Brittany Benner, spokesperson for the Florida Office of Insurance Regulation. “Furthermore, the toll this has taken on the property insurance industry is evident by State Farm’s decision — earlier this summer — to stop writing flood insurance policies.”

Since 2002, the National Flood Insurance Program has gone through 11 last-minute reauthorizations and the program was allowed to lapse four times.

Whenever there’s a lapse in the program, Fowinkle said insurance agencies such as his are required by law to mail flood policyholders cancellation and non-renewal letters.

Fowinkle, who estimates his agency has at least 1,000 flood policyholders, says that creates unnecessary and costly work.

“The insurance companies don’t like the uncertainty; they can’t plan ahead with that kind of up-and-down junk,” he said.

Starting Oct. 1, State Farm Fire and Casualty will stop writing new flood insurance policies. State Farm agents can enroll as direct servicing agents with the program to continue writing policies, however the company announced earlier this year it was done with the program due to the ongoing interruptions.

“Agencies do not want to put up with that because right now that just puts us in a pickle,” said Andy Gregory, president of Des Champs & Gregory, a Bradenton-based insurance agency.

Despite the continuous interruptions, Des Champs & Gregory will stick with the flood insurance program. However, Gregory said that means his agency, like others, will continue to carry the responsibility of having to notify policyholders of the suspensions and renewals.