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Flood Insurance Program set to Expire July 31st !!!

Posted 07-17-2018 at 03:00 PM by Sunshine Rules


Here we are yet again. The National Flood Insurance Program (NFIP) is set to expire in two weeks unless Congress passes legislation to extend the program yet again.

So what would happen if the NFIP lapses?

While existing policy holders would retain coverage if the program is not reauthorized, no new policies could be written. During past lapses in coverage, borrowers were not able to obtain flood insurance to close, renew or increase loans secured by property located within designated flood zones until Congress reauthorized the NFIP.

During the lapse in 2010, it is estimated that 40,000 residential home sales per month were canceled or delayed across the country.

Additionally, homeowners whose policy expires after July 31 would be unable to renew it if the program expires. However, policy holders get a 30-day grace period, so they would at least have coverage for a month after their policy ends.


When Congress last extended the NFIP, the intention was to overhaul the program before the 7/31/2018 deadline. That obviously has not happened. The problem is that the NFIP is not financially sustainable over the long run. According to the Congressional Budget Office, the program is not charging enough in premiums to cover expected claims in catastrophic loss years, and has already borrowed over $30 billion from taxpayers to make up the difference.

There are no easy solutions to the NFIP financial deficits, and it is likely that Congress will do another short term extension to the program to "kick the can" down the road rather than address the underlying problems.


As a home buyer in FL, it's important to know the flood zone designation of any residential property you are considering (that includes condo communities as well) before you write any offers. Flood insurance rates quoted now are not necessarily what property owners will be paying into the future, premium increases are probable. Even if you are paying cash for a property located within a flood zone and therefore are not required to carry flood insurance, if you decide to sell at some point down the line, the flood insurance premium rates may have an impact on sales prices.

By the way, not all homes located within designated flood zones are near water, and not all properties backing up to water are in designated flood zones, so verifying flood map designations is key.
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