Flood Insurance: House Passes Bill Reauthorizing Program For 5 Year & Makes Reforms
We've been monitoring the topic of flood insurance (recall the short-term extension of the program through September 30).
This is a topic that can jump up and literally wash away an unsuspecting lender or servicer.
Indeed, the lapsing of the National Flood Insurance Program is a "nuts'n bolts" topic that can get lost in all of the focus on the Dodd-Frank Act.
Some how, in the midst of that focus, the House passed H.R. 5114, with reauthorizes the National Flood Insurance Program for 5 more years (and makes some changes to it).
Known as the Flood Insurance Reform Priorities Act of 2010 (amending the NFIP), the House bill now goes to the Senate, where it should quickly float on through for signature by the President.
H.R. 5114 was introduced by Representative Maxine Waters (D-CA), and supported by a nice cross section of the real estate and the insurance industries:
- National Association of REALTORS
- National Association of Homebuilders
- American Insurance Association
- Property Casualty Insurers Association
- Independent Insurance Agents and Brokers of America
Some interesting points or aspects of this:
- Actuarial rates are phased in for pre-Flood Insurance Rate Map properties (i.e, those built before the effective date of the applicable Flood Insurance Rate Map)
- Maximum coverage limits are raised
- Requires notice to renters about content insurance (WATCH FOR THIS TRIP WIRE!!)
- Establishes a Flood Insurance Advocate (similar to the Taxpayer Advocate at the IRS)
Be sure to pass this information along to your risk manager.
And DO NOT overlook the topic of flood maps and insurance as you deal with distressed investments.
If you have any comments or other resources on this topic, please post a comment below.
