Continuing Resolution Extends NFIP through March 8, 2024
Congress passed and the President signed HR 2872 which provides funding for the federal government and authorizes the NFIP through March 8, 2024. While bills have been introduced which would provide standalone reauthorization of the NFIP, the NFIP’s authority remains tied to the federal budget approval process.
As a reminder we recently shared updated resources and guidance on the impact of a lapse in the NFIP.
Learn more on the Congress Gov website HR 2872v
Existing Version of SFHDF Remains Current for Continued Use
As previously shared, FEMA’s webpage containing the SFHDF (“Standard Flood Hazard Determination Form”) includes a statement affirming that the existing version of the form remains acceptable for use: “The current version of the form is not expired and may continue to be used until further notice.”
Once a new version of the form is released by FEMA we will notify you via these Industry Alerts.
Learn more on the FEMA website
Latest Flood Advocate Office Report Highlights Policy Lapse Implications
The Office of the Flood Insurance Advocate (OFIA) recently issued an annual report which, among other subjects, highlights the rise in policyholder issues, questions, and concerns related to a lapse in an NFIP policy because the policy was not renewed within the 30-day grace period.
Timely renewals of existing NFIP policies are critical under NFIP rating methodology because premium increases for such renewals are statutorily limited to 18% until the premium reaches the full-risk premium. NFIP refers to this gradual annual premium increase as the “glidepath.” When a policy lapses, the newly issued flood insurance policy is not on the glidepath and so the policyholder faces the full-risk premium immediately.
Within the report the Advocate’s office cites three possible negative impacts of an unplanned policy lapse:
• An uncovered loss might occur during a lapse in coverage.
• A lender may ‘force place’ private flood coverage at a higher cost than NFIP insurance during the period without NFIP coverage.
• The reinstatement of coverage may result in the loss of eligibility for statutory discounts meaning the reinstatement is at a full-risk rate.”
Mortgage servicers are encouraged to consider this information about timely payment of flood insurance premiums out of escrow accounts when applicable.
Read Annual Report on the FEMA website