Lawmakers leave flood insurance in limbo

April 5, 2010 3:43:43 PM PDT
Flood insurance can be a life saver for a homeowner, especially here in Houston. In many flood prone areas, it is even required. But now some home buyers are finding themselves stuck -- left in limbo, because of unfinished business in the US Senate.

You probably wouldn't think the unemployment benefits extension and money to float the federal flood insurance program had anything in common. But the bill was linked and last week it was blocked. Now the realization is starting to sink in with would-be home buyers, realtors and insurance agents.

Nearly six million people have federal flood insurance, according to FEMA, and Richard Brunk is one of them. The idea that the program for the moment is now unfunded by Congress is in a word, stunning

"Thank you for the good news. I'm freaking out," Brunk said.

It's stunning realtors as well. Home sale closings, certainly for properties in flood prone areas where flood insurance is required, will be delayed until the program is reinstated. The thought is funding will be restored when Congress returns next week. But in real estate, time costs money and opportunity.

Danny Frank with Keller Williams Pearland said, "How's it going to affect their life over the next two weeks if they can't get that flood insurance and they can't close, will they be able to buy this house?"

It concerns more than home sales. New policies may be written, but may not necessarily be in force until the program is funded again. There's also the matter of renewals if they're due now.

"I would basically tell them that we're not in a position right now to bind new coverage or increase coverage," explained insurance agency owner Craig Slayter. "I'd have to give them the company line."

If you have a flood insurance policy that is due now, we're told it's best to go ahead and send in the payment in the hopes that the policy can be bound over.


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