National Flood Insurance Program Expires at End of May

Florida residents are all too familiar with floods and hurricanes. They know that flood and hurricane insurance is a necessity. The National Flood Insurance Program (NFIP) is due to expire on May 31, 2012. Ironically, this is one day before the start of hurricane season on June 1.

It is important for any Florida homeowners without flood insurance to sign up immediately. Not only is there is a chance that Congress will not renew the national program, but there is a thirty-day waiting period for current Florida homeowners. This means a lapse in coverage for water damage could occur.

Issues remain even for Florida homeowners with flood and hurricane insurance. Congress has historically only extended NFIP for short periods of time because of disagreements over amendments to the bill. Home and insurance companies are currently advocating for long term extensions.

Additionally, Florida homeowners might be under the impression they are covered for floods through their homeowner’s policy. In reality, these policies often only cover damage from water that comes from the sky, such as a rainstorm. They do not cover water from a storm surge. Only specific flood insurance covers this.

Problems also exist for homeowners who close on properties located in designated flood zones after the NFIP expiration. New flood policies are not written when the NFIP is not in effect. Lenders do not release money to homeowners in active flood zones without active flood policies in place.

For all of these reasons, it is essential for Florida homeowners to make sure their flood and hurricane insurance is up to date before May 31. This is especially important, obviously, for homes located in flood zones.

Source: “National flood insurance program ends day hurricane season starts,” The Destin Log, May 4, 2012