Need Flood Insurance? UPDATE 9/14/2017

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Flood Ins

September 14, 2017 – Congress just voted to extend the NFIP for 3 months till the end of December 2017. This, in response to the natural disasters affecting Texas, Florida and to a lesser extent, several other states on the eastern seaboard and U.S. Territories in the Caribbean.


4 years ago the Federal Government was looking for a way to amend or close down the National Flood Insurance Program – NFIP. This is a program where the government subsidizes home insurance for losses due to flooding.

To be sure, we as taxpayers are the ones who pay for this program, so it makes sense that homeowners who build or own on the water and/or coastlines of the U.S., bear the responsibility for their property. Congress decided 4 years ago to give FEMA time to redraw flood maps across the U.S., and insurers time to set new rates for flood insurance. And possibly, home owners time to flood proof their homes.

Well that time is up and FEMA has finished or soon will be with redrawing maps, insurance companies supposedly have new rate schedules. The problem is, many policies may be too expensive for homeowners to buy. If your home is mortgaged, your lender will require you to buy flood insurance. If you are buying a waterfront property and have a mortgage, I would advise you to look carefully at your costs to insure the property.

Buyers need flood insurance? Close before Sept. 30
© 2017 Florida Realtors

    WASHINGTON – Aug. 4, 2017 – It looks less likely that Congress will finalize a flood-insurance bill (the “21st Century Flood Reform Act” or H.R. 2874) before the National Flood Insurance Program (NFIP) is scheduled to expire.

    “NFIP is due to expire on Sept. 30, 2017,” says Florida Realtors President Maria Wells, broker-owner with Lifestyle Realty Group in Stuart. “This is of great concern for Floridians since we represent 40 percent of all NFIP policies in the U.S.”

    Congress must pass the bill and President Trump must sign it before Sept. 30 to avoid a disruption in flood insurance coverage. However, lawmakers won’t return to Washington until Sept. 5, Wells says, and both chambers “have many issues to deal with.” While bill passage is still possible, she considers it unlikely before the deadline.

    Impact on Oct. real estate sales
    While the flood insurance bill’s passage remains a concern, homebuyers face a more immediate problem after Oct. 1: Mortgage lenders require proof of property insurance before they will lend money at closing, and they require proof of flood insurance if a property is located within a FEMA-designated flood zone. If homebuyers can’t secure proof of flood coverage, their closing could be cancelled or delayed.

    “Take precautions if you have pending listings in September that are located in mandatory flood zones,” advises Wells. “Try to close before Sept. 30.”

    Wells has been active in the NFIP reauthorization effort working with the National Association of Realtors®(NAR) and directly with lawmakers. Should Congress fail to pass H.R. 2874 before the deadline, she says NAR is hoping Congress will pass a short-term extension of the current program to avoid coverage interruption.

    However, “there is nothing pending in the House or Senate so far to extend flood coverage through re-authorization,” Wells warns. “NAR is hopeful all the hard work they have done to work with Congress to get a bill passed will still happen – however, there is nothing yet.”

    The bottom line for Realtors selling homes in flood zones: Assume flood coverage will expire after Sept. 30 and plan accordingly.

    “Be on the lookout for a Call To Action around Aug. 22, 2017, to urge the reauthorization,” adds Wells.

    A Call to Action is one of the strongest tools in Realtors’ arsenal. Once issued, it asks all members to email their lawmakers, a move that takes only a few minutes through NAR’s automated system.

    “This is a volatile issue for our state and Florida’s voice needs to be strong,” says Wells. “We will count on all members making their voice heard.”


About John F. Muscarella

Broker/Owner of River Farm Properties, LLC, John represents the new generation of online Realtor. With over 30 years in real estate investing, executive roles in sales & marketing, he brings experience and perspective, providing thoughtful and ethical advice to clients. He thoroughly enjoys meeting new people and writing about real situations - the humor, local information and at times the pathos of the industry. His local focus in real estate is Venice/Sarasota, Florida where he maintains a Real Estate Office. John's other interests include performing (a Conservatory trained opera singer and former founder & Managing Director of The South Shore Opera), cooking, wine, golf, tennis, sailing, and travel as often as time will allow. He has a family of two sons and three daughters; he and his wife live in Venice, FL Contrary to this paragraph, I don't always write in the third person.
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