Flood Insurance - Reinstatement of FEMA Flood Insurance Just in Time

Knowing that the lapse of Flood Insurance Funding could literally devastate millions in the path of Hurricane Alex, the U.S. Senate temporarily reauthorized the federal flood insurance program, though this temporary fix is only in place through September 30th of this year. If things in Washington go according to normal, they might get through a permanent bill just in time to delay the budget process for the DOD, Department of Defense, which will be due in October, another annual milestone that always seems to be a day late and a dollar short.

Regardless, the bill was passed June 30th, is retroactive to June 1st, when the funding of the program expired and will be in effect through September 30th. President Obama signed it on July 2nd.

It is amazing that this program, that is so critical to the housing market, especially during this financial crisis, was not only in jeopardy, but not enacted in time to prevent the trickledown effect that this would have. Any home purchase deemed to be within a flood zone could not close as planned. Realtors and prospective home buyers and sellers were grinding their teeth in frustration as once again the guys in Washington seemed to be totally disconnected from the mainstream by not understanding the importance of having the new funding and bill in place prior to the old one's expiration. Even those who already owned homes in flood zones but that required renewal were put on hold and at risk. In Texas alone, more than 680,000 residents have flood insurance policies and almost 10,000 of them are in Nueces County, where hurricanes often come ashore or cause flooding and devastation.

If this had not been enacted, then those same people would have been applying for disaster assistance instead, which would have done nothing more but cost millions of tax-payer dollars in claims. And, in true Washington style, there has been no apology and Congress has not given a time-frame for revisiting the original legislation; they are only expected to revisit it before the temporary reauthorization expires. In the mean time, everyone is now scrambling to get homes sales closed and to reinstate lapsed policies, no doubt tapping into overtime pay that would not have been required if Congress had acted in a timely manner.

Maybe it is time that the options for flood insurance be given to the private sector, rather than being controlled by the government. Wouldn't that make a whole lot more sense? Doesn't Congress have a whole lot more to worry about than continuing to manage a program that would be better handled by the insurance companies that are experienced at this kind of thing? Wouldn't it reduce government spending? It is surely true that Congress's inability to get things done on time would not have impacted so many if the private sector held these flood insurance policies. What do you think? Let your representatives in Congress know how you feel, especially if you have been affected, or know of persons affected by Congress's historic, but normal, inability to act on time and the government's inability to properly manage one of its programs.