REALTORS® Warn of Doomsday if Flood Insurance Expires
March 30, 2017
Time is ticking for the National Flood Insurance Program. In just six months—on Sept. 30—the NFIP is set to expire, and REALTORS® are warning that could pose a major threat to home owners and property sales.
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“When the NFIP expired in 2010, over 1,300 home sales were disrupted every day as a result,” says NAR President William E. Brown. “That’s over 40,000 every month. Flood insurance is required for a mortgage in the 100-year floodplain, but without access to the NFIP, buyers simply couldn’t get a mortgage or vital protection from the number one cause of loss of property and life, flooding.”
The National Association of REALTORS® is working with lawmakers to strengthen the program and also create a path for a private market to take hold ahead of the Sept. 30 expiration.
Brown notes that policyholders in more than 22,000 communities across the country rely on the NFIP to protect them from flood risks, such as torrential rain, swollen rivers and lakes, snow melt, failing infrastructure, and storm surges and hurricanes. Coastal communities tend to be at greatest risk of flooding.
“When the lifeline is cut off, the NFIP can’t issue new policies or renew existing residential or commercial policies that expire,” Brown notes. “That means current homeowners and business owners may find their most important asset unprotected if the program isn’t renewed.”
Last year was the third largest claims payout year in the NFIP’s history, costing more than $4 billion, according to NAR.
“The NFIP isn’t perfect, and reforms are needed,” Brown says. “Congress has six months to do the right thing and pass a long-term reauthorization of the program. We’re hoping they do just that.”
—REALTOR® Magazine Daily News
Updated: February 14, 2020