Lack of flood insurance could be devasting if Congress doesn't bring it back when they reconvene on April 12.
Although the heavy rains in southern New England have stopped, residents are still dealing with the heavy flood waters. Some neighborhoods were entirely inaccessible and homes suffered major flood damage. Thankfully, homeowners have flood insurance to turn to . . . or do they?
On March 28, the U.S. Senate let the federally backed National Flood Insurance Program expire due to political issues. Even though on March 17, the U.S. House of Representatives passed an extension of federal coverage through April 30, the bill stalled in the Senate. Although Congress will reexamine the issue when they reconvene on April 12, this is not helping many home buyers whose purchase requires flood insurance and who were hoping to close on their home purchase in the two-week interim period. Plus, it further stagnates the economy with stalled home purchases, as even after Congress is back in session it will take time to discuss and pass a bill bringing the National Flood Insurance Program back.
New homebuyers are currently unable to purchase flood insurance, which puts their purchase in jeopardy. Unable to obtain a home mortgage because new or repeat homeowners can’t get flood insurance, the home buyer tax credit may also be lost. This is scary, especially in light of the recent flooding in New England.
Does this affect homeowners with existing mortgages? No, as those who already have flood insurance are still covered, at least for now.
Photo Credit: American Red Cross on www.flickr.com
