National Flood Insurance Program Extended until Sept. 30
July 2, 2010
Another real estate victory was achieved June 30, 2010 when Congress passed the National Flood Insurance Program Extension Act of 2010 (HR 5569), reauthorizing the extension of the National Flood Insurance Program (NFIP) until September 30, 2010.
The bill is retroactive and covers the “lapse period” that began June 1, 2010, thereby allowing any stalled transactions to move forward.
Any new policy applications or renewals that were signed and submitted during the lapsed period will be effective from the date of application. In the case of waiting periods, the waiting period will start from the date of application.
About the National Flood Insurance Program
The NFIP provides flood insurance to homeowners in participating communities in flood-prone areas, who could not otherwise obtain coverage due to cost or ineligibility. Without insurance provided through NFIP, property owners in federally designated areas across more than 10,000 communities nationwide (including areas throughout the Cincinnati region and Southwest Ohio ) could not obtain mortgages.
The NFIP also produces the Flood Insurance Rate Maps (FIRMs), which are critical for the transaction of properties located in, or adjacent to, a floodplain. If these maps are not updated regularly, the information may be incorrect and a buyer may be unaware that a property is at an increased risk for flooding.
Additional Background and Issue Summary
Natural disasters, such as hurricanes, floods, and earthquakes, are devastating for communities and individuals, and are costly to insurers, and state and federal governments.
Insurers have responded to the costs of recent natural disasters by raising premiums or declining to write policies in disaster prone areas. Without a greater government role in property insurance, many homeowners and potential home buyers may not be able to obtain insurance coverage.
As a result, there may not be sufficient resources or coverage in many parts of the country to help homeowners and their communities recover from future natural disasters.
