The nation’s largest trade organization has mobilized its more than one million members in order to encourage Congress to reverse its position on the recently expired National Flood Insurance Program (NFIP). The National Association of Realtors (NAR) has sent out its red warning flags that Congress has once again allowed the NFIP to expire as of May 31st, 2010.
Hurricanes, floods and earthquakes have devastated communities where these disasters are prone to occur. In states like Florida, where mortgage providers require flood insurance, homeowners have been surprised with the cost of flood and hurricane insurance. The cost of this insurance has been a deterrent to the real estate industry and housing market, as the insurance remains a very necessary coverage.
Ever since Hurricane Katrina, the cost of insurance has steadily risen. In fact, the cost of this insurance is often more expensive than the annual real estate taxes. Under the NFIP, the government has taken an active role in assuring homeowners that resources are available to keep coverage available in these stressed areas.
“The NFIP provides flood and hurricane insurance to homeowners in participating communities who could not otherwise obtain coverage due to cost or ineligibility.” Currently property owners in 10,000 such communities make use of the federally designated areas.
The NFIP is also responsible for producing the Flood Insurance Rate Maps (FIRMs). If these maps are not updated regularly, needy communities can be omitted from the designated flood areas.
The May 31st expiration of NFIP marks the third time that Congress has allowed this very necessary program to expire, thus endangering the availability of the insurance to existing and new homeowners. The NAR has always been able to motivate Congress to reconsider the expiration.
The trade organization has once again initiated a direct e-mail and mail campaign to Congressional members and its own very powerful lobbyist group in the hopes of causing immediate and retroactive action.