Tuesday, June 29, 2010

Senate Again Rejected Bill Containing Flood Insurance Program Restart

The U.S. Senate,June 17th, again voted down a legislative package on jobless benefits, Medicare payments to doctors and business tax breaks that also contains reauthorization of the nation's flood insurance program.

Despite reducing the overall cost of the package, Democrats were unable to muster the 60-vote supermajority needed in the face of solid opposition by Republicans. The vote was 56 to 40.

The bill would add an estimated $55 billion to the federal deficit over 10 years compared to about $80 billion for a version voted down earlier this week. It seeks to extend unemployment insurance and tax breaks for businesses while jettisoning a 20 percent pay cut in payments to doctors treating Medicare patients. It would raise taxes on investment managers and raise the tax for the oil spill liability fund.

Senate Republicans have opposed adding to the deficit. Democrats have argued that the government spending is needed to bolster the economy.

The bill has already passed the House.

The National Flood Insurance Program has been unable to issue new or renewal policies since it was shut down May 31, although it is still paying claims. It is the fourth time in the past year that the program has been interrupted due to the failure of Congress to reauthorize it for an extended period.

Insurance carriers and agents have been urging Congress to pass a long-term reauthorization.

The Independent Insurance Agents; Brokers of America sent a letter to the leadership of the Congress warning that "lapses in this program cause confusion and leave many homeowners and small businesses unprotected during a delicate economic period and a dangerous time of the year."

June 1 was the first day of the 2010 hurricane season which weather forecasters have predicted could be very active.

Buyers will have to buy private flood insurance until the National Flood Insurance Program is extended by Congress.

In addition to this extension issue, flood coverage minimums are going up.  With the recent disasters in Louisiana and Tennessee, the amount of needed coverage has gone up.  If you are in a flood zone, I recommend you consult with your insurance broker now on how much you need today.  If you are not planning on selling or re-financing, you won't have to increase it but I strongly recommend you do it voluntarily as soon as Congress passes the bill (likely September as they are getting ready for the Summer recess).  Flood Insurance from the Federal Government is one of those insurances that is a great deal for what you are getting.  The reason why private companies don't underwrite flood insurance (except at exorbitant rates) is because it's not profitable.

Information provided by Donna Antonucci
Prudential  Castle Point Realty
203 Washington St.
Hoboken, NJ  07030

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