Congress Extends Flood Insurance Program To September 30th
Update July 19, 2010
The House of Representatives has approved a five years extension of the flood insurance program. It has not yet been signed into law. It must still pass the senate before it can be sent to the President for signature.
Federal flood insurance is again available to buyers of Daytona Beach and Ormond Beach homes and condos. This is very important for people buying on the beachside and near waterways on the mainland. The legislation allows policies written before the extension to be retroactive, however, and this is very important, there is still a 30 waiting period between the date a policy is written and when it takes effect.
There are two important points to remember about flood insurance when buying a home:
- The policy takes 30 days to be effective after it is written
- Close before September 30th if you need flood insurance
We talked about the 30 days waiting period above, but if your are required to have flood insurance by a mortgage lender, you will need to set your closing date before September 30. I advise targeting 3-4 weeks earlier to make sure that any delays don’t push you into October. Also, policies will not go into effect if there is a storm that could affect the area. Give yourself plenty cushion.
If you’re paying cash, your closing won’t be delayed, but you could be without flood insurance until congress decides to extend coverage again. The current extension is the fourth extension without a permanent law. There was a delay in the last extension that caused delays in about 1,200 closings a day across the country. The likelihood of another delay is high.
Please contact your insurance agent and instruct them to make sure that the flood insurance policy will be effective, not just written, on the day that you close.