Congress’s inability to approve a government funding bill has resulted in the expiration of the National Flood Insurance Program. Louisiana Commissioner Tim Temple says this means the NFIP cannot issue new or renew existing flood insurance policies.
“If you’ve got a policy that renews tomorrow or next week, as long as this shutdown’s in effect, they will not be issuing renewals and they will not be writing new policies, which is bad for a lot of people,” Temple said.
NFIP policies currently in effect will continue until the end of the current one-year policy term. Temple says the NFIP can still pay claims, but that will stop once available funds run out.
“They also can’t borrow any money, should they run out of the funds that they have on-hand handling claims which is, again, a very bad situation considering we’re still in the middle of hurricane season,” Temple explained.
The government shutdown and the failure of Congress to reauthorize the National Flood Insurance Program also impacts real estate transactions. Temple says properties in the Special Flood Hazard Area are required to have flood insurance.
“You’ve got a home that you’re closing on, and you live in a zone that requires a flood policy. It’s going to be a problem. You’re not going to be able to close,” Temple said.
Temple says private flood insurance is available, and home buyers can contact a property insurance agent for assistance in helping to find private flood insurance.
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