Flood Insurance Extension

The Financial Services Committee of the U.S. House of Representatives voted unanimously on Tuesday to approve a five-year extension to the National Flood Insurance Program, the nation’s largest flood insurer. The bill also includes a mandate to improve the country’s flood maps.

Federal law requires the purchase of flood insurance for a federally backed mortgage in special flood hazard areas designated by FEMA. Private flood insurance is also available in many high-risk areas, but the NFIP may be the only option for some.

The bill will now go before the full House for approval. The Senate must be then approve it to bring it to President Donald Trump.

Flood Insurance Premiums Are About to Go Up

Many homeowners and buyers in flood-prone areas will see higher flood insurance premiums starting April 1. The premium hikes, which are required by law, will be as little as 2 percent for some properties and as high as 24 percent for others. On average, the increase will be about 8 percent.

“The National Flood Insurance Program requires premiums to rise on certain classes of properties over a period of years until they’re paying the full actuarial rate on their risk,” say analysts with the National Association of REALTORS®. “The 8 percent average increase is right in the range of increases for the last couple of years, so there’s nothing unusual here. It’s just the standard rate increase.”

Learn more about the rate changes in a bulletin released by the Federal Emergency Management Agency, which administers the National Flood Insurance Program.

Big Win for Housing, “Flood Insurance Extended”

Signed into law Friday was a five-year reauthorization of the National Flood Insurance Program, which will help keep flood insurance more accessible and affordable in protecting property owners in more than 21,000 communities where flood insurance is required for mortgages. The program now will be extended through Sept. 30, 2017.

The extension will “end the uncertainty of NFIP stopgap measures and shutdowns and will help bring stability to real estate markets,” says Moe Veissi, president of the National Association REALTORS®. NAR advocated for the long-term reauthorization of NFIP.

According to NAR, more than 5.6 million property owners rely on the program for affordable flood insurance. When lawmakers let the program expire, about 1,300 real estate transactions were delayed or canceled each day, according to NAR research.

“Without the NFIP, families and business owners across the U.S. would go without essential flood protection, since the private market cannot guarantee the availability or affordability of flood insurance,” according to an NAR press release. “The NFIP also saves taxpayers money, since it serves as an alternative to expensive federally funded disaster relief for flood victims.”

“Available and affordable flood insurance is essential to properly functioning real estate markets, and the certainty of a five-year reauthorization will allow long-term real estate investments that are vital to the U.S. economic recovery,” Veissi says.

Source: National Association of REALTORS®