Recently the National Flood Insurance Program halted coverage for flood insurance across the entire country.
Flood insurance is a federally backed program. As a result, the NFIP’s policy change means that every carrier that would typically provide flood coverage is affected. Policies affected include new policies, renewals or changes to any current policies in force.
The Senate met on April 12 regarding this matter and did not have good news for anyone with a property in a flood plain as they were not able to pass the bill to extend the NFIP. However, they did pass cloture by a vote of 60-30 to proceed with a short term bill. This is an important first step in getting the program reauthorized.
What Does this Mean?
Until further notice, there is no coverage for flood insurance anywhere in the United States.
Aside from not having coverage in the event of a flood, another major problem is that lenders have not changed their requirements for homes that are located in a flood plain. If you are purchasing or currently living in a home that requires flood insurance…you are at natures mercy until the FFIP is reauthorized.
Ryan Borland is an insurance broker with Guardian Insurance Group. Contact Ryan to discuss your Auto, Home, Life or Commercial insurance needs.
Note from Karen Goodman: Since the current lack of flood insurance policies will impact the sale or purchase of homes in flood zones, my broker, Klaus Bank, did some additional research. Apparently, some lenders will still allow a loan to be funded for a purchase of a home in a flood zone.
I have checked around a bit and found out that Fannie Mae, Freddie Mac, and FHA have some interim guidelines in place until the Congress resolves this issue. Some of those guidelines are: Application for flood insurance must been submitted, proof that funds are available to pay premium….plus a few others.
It is my understanding that some lenders have decided not to loan until Congress resolves the issue, but others are still completing loans as long as certain guidelines are met.
What should you do….
Work with the lender to find a solution to close on time. If lender will not move ahead….you may want to check need to check around