In Washington D.C., Congress has given the nod to an extension of the National Flood Insurance Program (NFIP), to maintain it until November 18, 2011, after having failed to pass a reforming bill for the program.
It is hoped that this extension will provide enough time for a reported deal to close, which is supported by both parties.
What this means to homeowners in any of the 20,000 communities that take part in the NFIP, is that if you will be purchasing a home or if you are attempting to buy flood insurance for a home, then this coverage will still be available to you. This is important, as some home purchases require this insurance.
President Obama will be the next person to review the short-term extension in order to provide authorization.
Other than through this program, flood insurance can be very expensive to obtain as a supplementary form of insurance. The typical homeowners insurance policy does not include flood insurance as a result of rising waters, as in the case of many hurricane losses.
The NFIP is operated by FEMA by way of several private insurance company partnerships, and provides premiums subsidies so that the flood protection can be obtained in an affordable way.
According to the Washington Post’s Ezra Klein, the NFIP had initially been designed to pay for itself, but it has been carrying a sizeable debt after Hurricane Katrina. The hurricane disasters of 2005 and 2008 and the floods they left behind, also drowned the program in $19 billion in debt.