The Federal Trade Commission’s “National Consumer Protection Week” kicked off on March 5, and a top consumer issue of importance to Realtors® is what will happen to the National Flood Insurance Program later this year.
Over 21,000 communities depend on the NFIP to protect homeowners, and that includes plenty of homes that aren’t in coastal areas or directly on the water. On September 30 of this year, however, the program will expire.
Although there is a small private market for flood insurance, the NFIP is the only available flood insurance option in many parts of the country. Without it, flood insurance may simply be unavailable – an outcome that’s bad for consumers looking to protect their largest asset.
Earlier this year, NAR 2017 President William E. Brown told REALTOR® Magazine that the risk of flooding may be more apparent than homeowners realize, suggesting that consumers may want to consider purchasing flood insurance even if they don’t see an imminent risk to their property.
“What many don’t realize is flooding can happen anywhere and we all live in a flood zone to some degree,” Brown said. “In fact, flood disasters have been presidentially declared across much of the Midwest over the last 6 months and just about everywhere else over the last 10 years.”
Realtors® are also keenly focused on the impact to prospective buyers. Lenders may be unwilling to offer mortgages to consumers looking to purchase a home inside a flood zone if the buyer doesn’t have access to affordable flood insurance. And in fact, the National Association of Realtors® estimated that over 1,300 home sales were lost when the NFIP expired in 2010.
For the latest on NAR’s action related to flood insurance, visit our resource page on the NFIP.
Copyright NATIONAL ASSOCIATION OF REALTORS®. Reprinted with permission.