Lack of funding for flood insurance program

HOUSTON The government usually is the one urging people to get flood insurance, but it is one arm of the government itself that is standing in the way of homeowners who want flood insurance.

It has been nine years since much of Houston was under water because of Tropical Storm Allison. It was just two years ago Hurricane Ike inundated Gulf Coast homes.

With the region's history, it's not hard to convince homeowners to get flood insurance, but right now, those who want a new policy or those who want to renew existing coverage cannot get it.

Homeowner Dorothy Carrol said, "They said that they were not doing new policies at this time and they would get back with me."

Carrol survived Hurricane Ike and knows how important flood insurance is.

"I lost everything," she recalled. "I lost my house, my furniture, my car, everything."

Insurance agent Leash Yu gets calls every day from homeowners who want flood insurance, but he can't sell it right now.

He said, "Congress has not voted to reauthorize the bill the National Flood Insurance Program was part of and because of that, the Flood Insurance Program is on hiatus."

Until Congress votes to fund the National Flood Insurance program, new policies cannot be written and expiring policies can not be renewed. But homeowners are being advised to go through the steps to get a policy anyway because Congress could act soon to fund the program.

"If Congress reauthorizes the program, the new policies will be retroactively effective, renewals will be retroactive to the day they wrote the check," Yu explained.

If flood waters strike a homeowner who is waiting for a new flood insurance policy or a renewal, the claim will be paid, but not until after the program is funded by Congress.

Yu said, "If they don't reauthorize the plan and something happens today, who is going to pay the claim? You have to pay out of pocket and submit that claim to Congress after the program is reauthorized."

The flood insurance program hiatus is also having an impact on home sales. Some closings are being extended because the new homeowner cannot get flood insurance.

We are told the delay does not affect policies that are in place now. If a flood happens, claims will be paid out; this impacts those wanting a new policy or a renewal. If the policy is in place right now, you are OK.

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