U.S. SENATE APPROVES AN EXTENSION OF THE NATIONAL FLOOD INSURANCE PROGRAM THROUGH NEXT MAY; HOUSE OF REPRESENTATIVES TO CONSIDER THE EXTENSION
On December 7th, the U.S. Senate approved an extension of the government flood insurance program through May 2012. The House of Representatives still must act to ensure a program extension before the December 16th expiration date and introduced an identical bill for consideration last Thursday. The National Flood Insurance Program, which is virtually the only source of residential coverage for flooding, has survived for years on a series of extensions, the most recent of which was due to expire on December 16th. The program is currently running a large deficit and Congress has struggled to reform its finances. Debates over reforming the program have led Congress to issue a number of temporary extensions of the program in recent years that have allowed for the multiple lapses. It currently has 5.57 million policies in force nationwide, insuring $1.25 trillion in property, and will not be able write new policies unless extended. If the program is allowed to lapse, it will not affect current policyholders, but may prevent prospective buyers from closing on new homes because banks and other mortgage lenders require owners to have flood insurance.