NFIP Latest Bulletin on Waiving 30-Day Waiting Period: As a Result of the July 1 2012 Effective

NFIP Latest Bulletin on Waiving 30-day Waiting Period: As a result of the July 1 2012 effective reform changes to NFIP in the recently passed 5-year extension law, FEMA/NFIP has issued another bulletin (attached), adding to their variation in meaning and treatment under “Flood-in-Progress” as a result of the multi-events in 2011. Industry folks refer to this as “Federal Fire-in-Progress.” This is a particularly significant consideration in the U.S. Western states of UT, ID, CO, AZ, NM, CA, OR & WA, but incidents have arisen in VA and other dry southeastern states.

This bulletin addresses the change in the application of the 30-day waiting period that usually applies after purchasing a new NFIP policy when there is a potential threat of flooding (to include mud-flows) from fires/recently burnt federal lands. Many times when significant forest fires across broad stretches of federal lands occurs it can be followed by down-mountain flooding and/or mudslides since there is no longer a forest canapé to catch/mitigate and absorb a significant down-pour. Most often these subsequent flooding events, run down- mountain/range/dump into rivers and cause flood damage to private property on &/or off these federal lands which heretofore have never experienced any flooding events. In the past, many examples of such surge flooding losses have been significant in both their property damage and cost of injury/death to people in their wake.

The new rule/instruction allows waiver of the 30-day waiting period if the consumer has purchased the new NFIP insurance policy no later than 60-days after the first authoritative federal employee has announced that the federal fire is contained and before the loss event has occurred. This is a SIGNIFICANT change to the NFIP 30-day waiting period rule. PIA members serving these communities are strongly encouraged to make all your current customers and prospects aware of this change; their ability to secure NFIP insurance; and that you are able to accommodate their NFIP insurance purchase. Most people don’t appreciate the significant increased risk they run from down/range/mountain/river flooding to include mud-flows (but not mudslides) after major forest fires.

Currently, FEMA/NFIP officials are first meeting with the state flood plain/emergency managers and department of insurance officials in UT, ID & CO on this matter. Please be alert to the fact that an additional clarification bulletin could be pending on this subject.