The National Flood Insurance Program (NFIP) was extended by a law that went into effect on March 2, 2010. However, the old program expired on Feb, 28, 2010 — leaving a one-day gap in which the program was not in effect.

U.S. lawmakers intended the new law to be retroactive to the Feb. 28, 2010 expiration but did not include such language in the bill. The Federal Emergency Management Agency has confirmed Congress is considering legislation to make the reauthorization retroactive.

Marsh's Flood Service Center is talking with markets to learn their position on the issue. Some carriers have confirmed they are processing all quotes that are not affected by the lapse. Others hesitate to issue policies until a decision is reached as they may have to cancel and rewrite the policies further if legislation eliminates the retroactive provision.

Marsh's U.S. Property Practice Leader Duncan Ellis said, "The inadvertent omission of the retroactive provision has caused some uncertainty in the flood market, but does not seem to be affecting many programs in practice. Our flood experts are working to contact any clients whose programs may be affected.

According to guidelines published by FEMA, March 1 and March 2 renewals should experience no gap in coverage, as there is a 30-day grace period for their payment to be received. For those clients whose programs have already lapsed, March 3, 2010, will be the first day coverage can be reinstated.

NFIP protects property owners from exposure not covered by standard insurance policies, including floods associated with hurricanes, overflow of rivers or lakes, rainstorms, mudslides, and winter melt. The short-term extension allows time for Congress to consider a longer extension.