Huge congratulations to the National Association of Realtors for its leadership in ensuring the never ending issue of flood insurance coverage. For some time now, Congress has been approving short-term extensions of the NFIP authority to issue flood insurance policies. Since September 2008 there have been more than 17 extensions, and authority has been allowed to expire two times, delaying or cancelling 1,300 real estate transactions each day of the lapse, according to NAR research. During the June 2010 lapse, NAR survey data estimates that more than 40,000 home sales were delayed or cancelled, which undermined home buyer and investor confidence.
What does this mean for home owners:
1) The law reauthorizes federal flood insurance authority for the long-term, eliminating the constant uncertainly that flood insurance wouldn’t be available.
2) It maintains comprehensive coverage for all properties, including second homes and vacation homes.
3) It’s a revenue raiser, which will help pay down a loan from the US Treasury to cover the massive Hurricane Katrina costs from 2005.
4) It improves the accuracy of flood plain mapping, which will continue a trend toward improved mapping, so that the industry has clarity over where flood insurance is required and where it’s not.
5) It builds in the opportunity for further improvements to the entire flood insurance program over time, so that if things are not working well, NAR and others will know it and have a framework for getting improvements built in.
There are many other positives to the new law, including a much improved appeals process for home owners to challenge t he accuracy of the flood plain map that the federal government is using for their area.