The third lapse so far this year in the National Flood Insurance Program continues after the Senate voted down a bill that would have extended the program. The National Flood Insurance Program  hasn’t been able to issue new policies, change coverage, approve renewals, or pay claims since May 31 when the latest extension expired according to the Des Moines Register. Nationally the program serves 5.6 million policies. “Certainly, it would be a big effect if it were not authorized again,” Tom Alger, spokesman for the Iowa Insurance Division, told the Des Moines Register. “Everybody recognizes the central role this plays in protection against flooding, particularly for residents and small businesses.”

The most recent push for an extension passed in the House before the June 1 deadline, but this week the Senate defeated it over budget concerns. The bill would have added $55 billion to the federal deficit over the next ten years according to Insurance Journal. According to Insurance Journal, 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.”

In the past, the National Flood Insurance Program is updated every five years, but when it expired in 2009, lawmakers have not agreed on a permanent extension, instead only temporarily continuing services for 30 days or six months at a time. “I think they need to redo the entire way they look at flood insurance,” Daniel Bell, an insurance agent with Absolute Insurance Agency in Iowa, told the Register. Bell hasn’t been able to sell flood policies for the past two weeks. “I think they need to set up something that is more long term, so people have more stability, especially if these renewals aren’t being authorized.”State Farm Insurance announced last week that it would no longer be servicing flood insurance, but rather would assist its customers to buy it directly from the federal government.

The confusion created by lawmakers pushed State Farm to announce it will no longer sell flood insurance, but instead direct customers to deal directly with the government. “Under this new process, while State Farm agents can continue to sell flood insurance, the government entity that’s running the program will now handle servicing it,” State Farm spokesman Phil Supple told the Register. “This kind of clarity should be best for all involved – especially policyholders.”