Insurance Scarce in Flood-Prone Areas
May 20, 2010
Realtor Magazine - 06/21/10
By M. P. McQueen
Expiration of the National Flood Insurance Program is leaving home buyers high and dry.
Congress still hasn’t voted to extend the National Flood Insurance Program, which expired June 1. It provides most of the flood coverage in the U.S. Because flood insurance is required on federally insured mortgages, closings have been delayed on an estimated 1,200 properties a day since the program expired, according to the National Association of Mutual Insurance Companies.
Congress is expected to reauthorize the program eventually and new policies will likely be retroactive, so home buyers should apply now to avoid being uninsured during the 30-day waiting period for a policy to take effect, insurers say.
Anyone buying a home worth more than $500,000 in a flood-prone area should consider high-value coverage, offered in 14 flood-prone states through Privilege Underwriters Reciprocal Exchange (PURE). This exchange sells policies with loss limits up to about $15 million.