People whose coverage is slated to lapse under NFIP, which is run through the Federal Emergency Management Agency (FEMA), could find themselves without insurance in the event of a flood if the government faces a prolonged shutdown.
“The main concern is whether buyers will have coverage if a flood occurs and whether FEMA will have sufficient funds to pay claims,” Austin Perez, senior policy representative for insurance Issues at the National Association of Realtors (NAR), said in a statement to The Hill.
The association sent a letter to congressional leaders on Friday urging them to extend the program.
“Without access to flood insurance, American families must rely on federal disaster aid, which is severely limited,” said group President Kevin Sears in the letter.
“According to NAR research, 1,400 property sales each day could be forced to move forward and go bare without the protection of flood insurance depending on lender approval. The risk of an unnecessary NFIP lapse puts American lives, families, properties and businesses at untenable risk and must be avoided,” Sears wrote.
Andy Winkler, managing director of housing and infrastructure policy at the Bipartisan Policy Center, said that this could also delay some real estate transactions, particularly in areas where flood insurance is required.
“If they don’t extend that NFIP reauthorization, historically, that means that home sales in places that require flood insurance are usually delayed,” Winkler said.
According to NAR, if there’s a lapse in the program, most regulators suspend requirements for flood insurance, which would allow home sales to move forward.
Perez said that “NFIP lapses complicate home sales, but most transactions can still move forward without flood insurance.”
However, if a flood actually occurs in one of these cases, homes without flood insurance may be left in the lurch.
Read more at TheHill.com.
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