National Flood Insurance Program Extended Five Years
One third of 5.8 million flood insurance policies are written for properties in Florida. The program had been temporarily extended 17 times since 2008.
Palm Coast, FL – July 18, 2012 – Washington has extended the National Flood Insurance Program (NFIP) for five years, ending September 30, 2017. The extension will bring a degree of certainty to the mortgage and real estate industries which have suffered through 17 sixty-day extensions since 2008 and two temporary shut downs, including one that reportedly stalled more than 40,000 home sales in June 2010.
One third of existing 5.8 million NFIP policies insure properties in Florida. The program was set to expire again July 31.
But the certainty comes at a price. The NFIP has an $18 billion deficit, mostly incurred from payouts for Hurricane Katrina in 2005. The new bill raises the maximum annual premium increase from 10% to 20%. It also mandates that currently subsidized premiums (for commercial properties and second homes) and for properties with repetitive flood claims be raised by 20% annually until they reach actuarially-adjusted levels. Minimum deductibles will also be set.
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