Important Flood Insurance Information


If you are closing on a new home and require flood insurance, you'll need to know what to expect due to FEMA's notification that they will not be able to sell or renew flood insurance policies under the National Flood Insurance Program during the partial government shutdown. 

  • NFIP cannot sell flood insurance policies unless FEMA reverses its policy decision or the government shut down ends.
  • Existing NFIP policies should remain in effect until their expiration date  (renewal date plus a 30-day grace period), and claims will continue to be paid as long as FEMA has the funds on hand.
  • Renewal policies are generally issued as long as the application is received prior to a lapse and the premium is received within the 30-day grace period. Other renewals must wait for reauthorization.
  • Property buyers can assume existing/renewal policies during a lapse. “Assignment of policies” (page 3 here) allows insurers to substitute the buyer’s name for the seller’s without having to reissue the policy.
  • Private flood insurance backed by a source other than NFIP (e.g., Lloyd’s of London) are not affected. Click here and here for some options. Please be sure to READ THE FINE PRINT.
  • The federal requirement to purchase flood insurance is suspended, which means it is up to lenders to decide whether to make loans in special flood hazard areas while NFIP insurance is not available.

The National Association of Realtors is working overtime to address this with FEMA. 

FEMA will only overturn their decision if they are presented with evidence that markets will be adversely impacted.

ACTION: If you are an agent or buyer and have a pending closing that requires the purchase of flood insurance, the National Association of Realtors needs to be notified  immediately so the information can be compiled and shared  with FEMA and Congress.

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