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House Voted to Entend Flood Insurance to Sep 2010
1034 Views :: 3 Comments :: :: South Padre Island, Second Homes

House Voted to Extend Flood Insurance to September 2010


A bill to extend the authority for the National Flood Insurance Program was passed by the House on June 24th 2010.

The bill would extend the program to September 30, 2010. The passage of H.R. 5569 is a first step toward helping home buyers to the closing table. Some lenders have refused to close loans on properties that required flood insurance, since the insurance program expired May 31.

The bill would make flood insurance coverage retroactive and would include all approved applications since that date. The bill now goes to the Senate for consideration.

Read more about Texas coastal home insurance at http://www.texasgulfcoastonline.com/Insurance.aspx
UPDATE 6/28/2010 by Jessica Savage of the Corpus Christi Caller Times

Flood insurance legislation stalls in U.S. Senate as storm heads toward Texas and Some residents are left without flood insurance
A congressional deadline to reauthorize the National Flood Insurance Program passed four weeks ago and the U.S. Senate has been unable to come to an agreement since then.

The indecision has put recent home sales agreements in limbo because buyers purchasing homes in a 100-year flood plain (i.e all the Texas coast) are required by the mortgage company to have flood insurance before they can close. Also, home owners whose flood insurance policies expired after May 31 are unable to renew them.

Last week the legislation stalled in the Senate after passing the House. The Senate is expected to meet Tuesday. It was unclear Monday whether the flood bill would be discussed. Alex was projected to hit land as a hurricane Thursday, anywhere between central Mexico and Victoria.

Sens. Kay Bailey Hutchison and John Cornyn, R-Texas, have urged resolution among their colleagues. "Allowing the National Flood Insurance to lapse is unacceptable at any time, but failure to extend it as we face an active hurricane season is unthinkable," Hutchison said in a statement sent by her press office. "I urge my colleagues to move quickly to help protect American homeowners from the devastation of floods."

The federal program enables property owners in participating communities to purchase insurance protection against losses from flooding. It is designed to provide an insurance alternative to disaster assistance.

The reauthorization legislation hasn't passed partly because it is attached to bills dealing with jobless benefits and business tax breaks that failed. A separate bill to extend the program retroactively through the end of September was approved by the House last week.

It's important that the bill is passed with a retroactive clause which means anyone who has applied for flood insurance since the lapse will be covered.
Insurance companies are continuing to sell flood policies, conducting business as usual, per instructions by the Federal Emergency Management Agency. However, any policies sold after May 31 are not effective until the legislation passes.

The decision affects hundreds of thousands of Texas residents, said Mark Hanna, a spokesman for the Insurance Council of Texas. More than 680,000 residents have active flood insurance policies. There are 9,388 in Nueces County.

We can only hope that they take some pretty quick action this week to put a lot of people who live along the Texas coast, their minds at ease with this. Now is not the time to not have the National Flood Insurance Program up and running, in the middle of hurricane season. (Senators) need to take action now.

The National Flood Insurance Program is a different policy from windstorm insurance regulated by the state. The Texas Windstorm Insurance Association will halt its sale of windstorm policies along the Texas coast when and if Alex becomes a hurricane.

Contact info for Texas U.S. Senators

Sen. John Cornyn
Harlingen: 956-423-0162
Washington DC office: 202-224-2934

Sen. Kay Bailey Hutchison
Harlingen office: 956-425-2253
Washington DC office: 202-224-5922
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Comments
Mike Stuart @ Thursday, July 01, 2010 12:59 PM
The United States Senate has passed the National Flood Insurance Program Extension Act of 2010 (H.R. 5569) an extension of the National Flood Insurance Program until September 30, 2010. This will allow transactions to move forward.

The bill is retroactive and covers the lapse period from June 1, 2010 to the date of enactment of the extension.
scared buyer @ Monday, July 05, 2010 12:21 PM
The September 30th deadline isn't far off. Kind of creepy, if you ask me, especially if you're a coastal property owner with a mortgage. Why doesn't the government want to make any long term commitments to coastal property owners? (Maybe because they're broke?)

There is now significant evidence to support the belief that it will become noticeably more expensive to secure and maintain mortgages on coastal properties in the years to come. That will decrease overall demand and negatively impact property values, though the exact amount is highly debatable.

My advice to island property sellers, or potential sellers: TALK TO YOUR REALTOR NOW, AND PRICE YOUR PROPERTY TO SELL ASAP, WHILE YOU STILL CAN!

NAR @ Sunday, July 25, 2010 2:40 PM
House Passes Flood Insurance Reform Bill
The U.S. House of Representatives approved a flood insurance reform bill that would reauthorize the National Flood Insurance Program to Sept. 30, 2015.

Passage of H.R. 5114, the Flood Insurance Reform Priorities Act, would strengthen the NFIP and bring certainty to many real estate markets that are much in need, NAR said, and commended Rep. Maxine Waters (D-Calif.) for marshalling the bill through House passage.

“This longer-term reauthorization of the NFIP is critical to millions of taxpaying American families who rely on the program for flood insurance, which is required to obtain a mortgage in nearly 20,000 communities across the nation. This would restore flagging confidence in a vital program by ensuring its continuation for several years without further disruption to real estate markets upon which our nation’s economic recovery depends,” said Vicki Cox Golder, NAR president.

Golder noted that the authority has been allowed to expire twice in the past two years while Congress approved eight short-term extensions, resulting in multi-week delays if not cancellation of thousands of real estate transactions. Such stop-gap measures have caused many hardships and lost sales for property buyers, sellers and their communities, she said.

The bill now heads to the Senate, where the prospects of passage are not clear.
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