Don't Get Left All Wet Without NFIP Coverage

As winter snows turn to spring rains and melting conditions, homeowners need to be sure that their properties are protected from flooding conditions. If not, they could be looking at not only damaged property, but financial headaches.

Given that health care reform took up the bulk of Congress' time in recent months, the National Flood Insurance Program (NFIP) ceased issuing new policies or renewing polices that would provide coverage for homeowners and those renting properties nationwide. Since Congress was not slated to return to work until April 12, homeowners and renters need to be on their toes when it comes to protecting their property.

The potential problems for homeowners and renters unfortunately do not end there.

The NFIP sunset could also lead to short-term problems for individuals who are looking to close on the sale of a property that resides within a special flood hazard area. It is important to note that consumers with present policies are still covered under the federal program.

Only individuals looking to acquire a policy during this time will be impacted. Until the time Congress gives the go-ahead on reauthorization, the NFIP is not able to issue new policies, increase coverage or give approval on renewal policies.

The most important thing for homeowners to keep in mind here is that standard homeowners' insurance policies do not offer them coverage for flooding.

Formed more than 40 years ago, the NFIP helps to provide a way for property owners to financially protect themselves from flooding associated with hurricanes, overflow of rivers or lakes, rain storms, winter melt and mudslides.

Much to the chagrin of some people, Congress is in charge of continued funding for the program.

Dating back to when Hurricane Katrina left the flood program $18 billion in the red and left policyholders without the necessary coverage to adequately recover, Congress has been discussing changing terms of the program.

Unfortunately for homeowners and renters, members have not been able to agree on how the coverage should change and how much policyholders should pay for the insurance.