Monday, November 21, 2005

Flood Insurance Payments To Resume

The U.S. Congress Friday "approved by voice vote legislation that raises to $18.5 billion the amount the National Flood Insurance Program can borrow from the Treasury every year." The Washington Post has the story.

Earlier, the House of Representatives proposed increased borrowing authority of only $8.5 billion, but the Senate increased that to $18.5 billion. The House finally found time to concur after spending Thursday embarrassing itself with a raucus debate over Mr. Bush's failed Iraq war policies.

Last week, orders went out to some 96 insurance corporations through whom FEMA provides national flood insurance to cease paying NFIP benefits because the program had run out of money. As WaPo reports:
Butch Kinerney, spokesman for the Federal Emergency Management Agency, the NFIP's parent agency, said insurers have been told to stop paying claims because the program has run out of money. "We are in a holding pattern to see what happens next," he said.

House Financial Services Committee Chairman Mike Oxley, R-Ohio, cautioned that claimants could "initiate legal actions against FEMA and the United States government if we do not act now."
In some cases over the past few days, flood insurance companies are known to have cancelled payment on checks already in the mail to Gulf Coast policy holders because of the funding shortfall. Some insurance companies said last week that they had sufficient unspent NFIP reserves to carry policy payments for a few days.

Technically, after escaping from his disastrous Asian tour, the president still must sign the borrowing bill before FEMA has increased borrowing authority for the NFIP program.

The National Flood Insurance Program covers approximately 4.5 million households in more than 20,000 communities with flood plains and low-lying areas.

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