Right now, most Americans who have real estate in flood prone areas of the U.S. are unable to renew their flood insurance under the National Flood Insurance Program, and the majority cannot find private carriers to step in and write it for them.
Congress has not renewed the program.
Those who can find a private underwriter are undoubtedly stuck with very high premiums, premiums that are too high for many to afford.
This leaves the property owners in violation of their mortgage contracts and it leaves them self-insuring any lost due to flood.
Let's think about this for a moment. Say a hurricane strikes Galveston again before the National Flood program is reinstated. Many property owners will have extensive damage, some will lose their homes and buildings entirely, and they will have no way to recover.
I joined many who have written Senator Kay Bailey Hutchinson since she understands the importance of the flood program. First, she was born and raised in Galveston County, and secondly, her daddy owned a casualty insurance agency.
Here's her response.
Thank you for contacting me regarding the National Flood Insurance Program (NFIP). I welcome your thoughts and comments.
Congress established the NFIP in 1968 to combat the mounting flood losses. Nearly 20,200 communities across the nation participate in the NFIP by adopting and enforcing floodplain management ordinances to reduce future flood damage. In exchange, the NFIP currently covers over five million homeowners, renters, and business owners in these communities through federally-backed flood insurance.
In 2008, I supported legislation to reauthorize the NFIP through 2013. The Flood Insurance Reform and Modernization Act of 2007, which passed the Senate on May 13, 2008, would have modified the program to address issues highlighted by the 2004 and 2005 hurricane seasons, and forgiven the outstanding debt of the NFIP. Unfortunately, efforts to resolve differences between the Senate bill and its counterpart passed by the House of Representatives were unsuccessful, and a long-term reauthorization of the NFIP was not enacted during the 110th Congress.
On March 10, 2010, the Senate passed H.R. 4213, the American Workers, State, and Business Relief Act of 2010, which is legislation that extends the NFIP through December 31, 2010. However, because the Senate-passed version differs from its counterpart in the House of Representatives, both chambers continue to work to modify H.R. 4213 to resolve the differences between the two versions.
Without H.R. 4213 in place to provide a year-long extension, Congress has passed a series of short-term measures to extend the authority of the NFIP. Yet on May 28, 2010, the authority of the NFIP to issue new flood insurance contracts lapsed when the most recent extension expired.
Homeowners in special flood hazard areas are required to purchase flood insurance. Without the NFIP, many homeowners have been unable to access affordable flood insurance necessary to receive, increase, extend, or renew their mortgages. As another hurricane season has arrived, we must act quickly to re-authorize and extend the authority of the NFIP.
As Congress continues to debate an extension of the NFIP, you may be certain that I will keep your views in mind. I appreciate hearing from you, and I hope that you will not hesitate to contact me on any issue that is important to you.
Kay Bailey Hutchison
United States Senator284 Russell Senate Office Building
Washington, DC 20510
It would be valuable if you would contact your U.S. representatives and demand that action be taken immediately, irrespective of whether or not you live in a flood prone area.
BILL CHERRY, REALTORS
DALLAS - PARK CITIES
Our 45th Year