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You Can Help Protect Homes from Water Damage

September 29, 2011

Flooding is a nation-wide problem, but on Friday, the federal program that insures homes against flood damage is expiring.

Between 1990 and 2005, flood disasters were declared in every single state, according to the National Association of REALTORS (NAR). In June of this year, flood disasters were declared in 10 states, one of them Illinois.

houses and a swing set with water everywhereYet, the National Flood Insurance Program (NFIP) will expire on September 30 and is in danger of not being renewed.

The NFIP was created in 1968 by Congress and today covers 5.6 million homes in 21,000 communities across the country.

In some areas, mortgage companies require homeowners to have flood insurance, and if the flood insurance program goes away, it will become virtually impossible for a home buyer to get a mortgage on a home in a flood zone.

Is that what the real estate industry needs in this extremely difficult economy: Another house-buying hurdle?

Since 2008, Congress has approved nine extensions and allowed five lapses for the NFIP. During a lapse last year, 47,000 home sales were delayed or cancelled, according to the NAR.

Private insurance companies offer little help; the four largest insurers that offer most private flood insurance policies cover only high-value properties at a price that doubles the NFIP’s.

Like much of the country, the NFIP is dealing with overwhelming debt. The Democratic House recently passed a bill to reform the program, but the Republican Senate countered with its own bill, and nothing is getting done.

Does it not seem like governmental egos are hindering economic recovery? From the small seat in my Chicago real estate, it certainly seems that way to me.

There is a form you can fill out that will be sent to your senators urging them to reauthorize the National Flood Insurance Program. Visit realtorparty.com and make your voice heard.

While experts are doubting that the Senate will budge, maybe enough noise will make them listen. It’s time for our elected officials to consider what’s actually best for our country — including President Obama’s job plan — and really make a housing recovery a reality.

Categories: Economy, Insurance

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Tracey

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