This past weekend Sunset Beach in Orange County was inundated by a large amount of water from two different sources. One from the sky delivered by torrential downpours from a very strong cell that moved through the area and also from the ocean due to high surf and large waves created by the powerful storm.
For those who's homes or businesses that were damaged by this wild weather, you should know that the National Flood Insurance Program, which protects properties against flood waters including rising tides, expired on February 28th which was already an extension from a previous vote. Furthermore, Congress has failed to vote in another extension. The Senate did not act quickly enough on a broader bill that would include yet another temporary fix for the troubled flood insurance plan.
According to a recent statement released by the Federal Emergency Management Agency, "Authorization for the National Flood Insurance Program expired February 28, 2010. If reauthorization takes place after this date, policies that are already in the process of being issued or renewed will be issued when Congress re-authorizes the National Flood Insurance Program. Payments for claims on existing policies will not be impacted; such policies will continue uninterrupted."
Congressional officials are working on a bill that will include an NFIP extension and could be passed sometime this week despite the fact that the program has several challenges ahead of it including unsecured funding which has no long-term solution.
Unfortunately, an extended shutdown of the program could affect many real estate transactions because many lenders do require flood insurance policies in order for sales to close escrow.
Mike Becker, national director of federal affairs for the National Association of Professional Insurance Agents' said in a statement: "While this lapse in the flood insurance program will likely be corrected retroactively this week in the Senate, it is disappointing. Insurance agents and their clients who need flood insurance are now at a disadvantage. Many real estate transactions require flood insurance, and the NFIP is the sole source for more than 95 percent of the flood coverage nationwide. We could see real estate closings delayed until this is fixed."
Much of the central part of Orange County could be hit by a once-in-a-lifetime flood which was seen just this past weekend in Seal Beach where they suffered modest flooding.
UPDATE: Last night the Senate voted final approval for legislation that included a reauthorization of the National Flood Insurance Program until March 28.
The extension still does not detail what revenues will be used to fund the program, but after they passed the temporary extension the Senate then began the consideration of a broader extension package, which will extend the NFIP to December 31, 2010.