Flood Barrier USA

National Flood Insurance Program Funding Deadline Looms … Again

Author: Donna Conneely

Once again a deadline looms for the National Flood Insurance Program (NFIP). At the end of this month the program will no longer be funded, and sales of homes in flood-prone areas will grind to a halt.

Funding for the NFIP is a perennial problem, as the funding process gets caught up in partisan squabbling in Congress. This year has been particularly bad, with two cliff-hanger funding deadline dates — and we are not even halfway through the year.

This latest deadline, at the end of May, would halt the insurance program at the start of the hurricane season. Although currently insured properties will remain covered, new policies will not be issued, and these properties will have no flood protection. Without this coverage, the banks will not issue a mortgage, and therefore the property cannot be sold.

The insurance industry is calling for a permanent, long-term solution to the NFIP funding problem. As the situation stands now, the program is a political hot potato that gets thrown back and forth across the aisle. The massive debt incurred in the wake of Hurricane Katrina makes the program fiscally unsound, and there is little agreement about how to address the problems.

Meanwhile, those who rely on the NFIP to insure otherwise uninsurable properties are left hanging, always waiting to see if the program will survive its next funding deadline.

This entry was posted on Friday, May 4th, 2012 at 10:25 pm and is filed under Flood Protection. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.