Flood Insurance Coverage May Leave Homeowners Dry
Many residents in Pennsylvania and throughout the United States have been unable to sell their homes since the National Flood Insurance Program (NFIP) ended in March. A Philly Burbs story discusses one Harrisburg-area family’s difficulty in selling a house that is situated on a flood plain. Their frustration, according to the article, stems from having to pay taxes on the property, but being unable to sell it. Meanwhile, prospective owners showed interest in their property but could not get the necessary flood insurance required in order to do so.
While left in homeowner limbo, the Federal Emergency Management Agency (FEMA) reports that the NFIP is over $18 billion in debt. In taking 18 days “off” in April, the NFIP created problems with the sale and re-financing of thousands of properties within flood plains throughout the United States. With the Senate voting to extend the flood insurance program within a $7.5 billion spending program, President Obama signed the bill, which also funds defense programs and unemployment benefits.
While FEMA does not call for flood plain homeowners to buy flood insurance, several mortgage companies do. Those who have not spent years becoming highly familiar with the ins and outs of insurance law may find these complex – and at the moment, unstable – matters tough to grasp.
FEMA reports that the typical annual premium for a policy under the NFIP amounts to approximately $500 a year. In cases similar to the family in Harrisburg mentioned above, those wishing to sell their home must act now because the extension only lasts until May 31. Time is of the essence even though government officials will be working to develop a long-lasting solution to the NFIP program debt that has been denying Americans the flood insurance they need to settle their property matters. If homeowners are frustrated now, let us hope that a solution is created by the time the extension reaches its end.