WASHINGTON — Many people trying to buy a house with a riverfront view were up a creek the past few weeks because of the temporary shutdown of the federal program that provides flood insurance.
Much was made of the thousands of workers losing their unemployment checks or their access to a federal health care program while the Senate took weeks to act on an $18 billion bill to extend, through the end of May or early June, several benefits programs that had expired.
Receiving less attention were repercussions from the interruption since March 28 in the National Flood Insurance Program, an arm of FEMA.
The Senate finally acted Thursday, the House quickly sent the bill to the White House and President Barack Obama signed it that night. But the effects of the nearly three- week gap not only left a mark but hinted at what will happen if the flood program is allowed to expire again May 31.
Every business day for the past three weeks, some 1,400 potential homebuyers were unable to close on the purchase of a home because they couldn’t get flood insurance, said Sen. Byron Dorgan, D-N.D.
Another 12,600 people a day saw their coverage lapse because they were unable to renew their policies, Dorgan said.
The legislation did have a retroactivity clause to protect those who couldn’t renew expiring policies.
The flood-insurance program was established in 1968, an outgrowth of the private insurance industry’s reluctance to cover flood damage. It now provides more than $1 trillion in flood insurance to about 5.5 million homes and businesses.
The lapse in flood-insurance coverage was but one more factor, along with tight credit and the foreclosure crisis, impeding the recovery of the housing market.
