Ask a real estate professional: Why can’t I get flood insurance?
Q: My bank just informed me that my loan has been approved. But I can’t close because I don’t have flood insurance for the property, which happens to be in a flood zone. How can this be? Isn’t this something I can get later on? — Teresa
A: Current authorization for the National Flood Insurance Program expired at midnight on March 28, and the extension that was to be passed by the Senate did not get put to a vote before the session was adjourned. Due to this expiration, the issuance of flood policies has been suspended for at least two weeks. As a result, borrowers requiring flood insurance can either buy it from a private insurer or postpone the loan closing until NFIP can be obtained in an adequate amount (tentatively April 12). The Federal Emergency Management Agency says lenders may consider assignment of a policy in order to obtain coverage through the NFIP during the hiatus. The closing papers must show that the unearned premium on the existing policy is paid by the buyer, but my suggestion is to proceed with extreme caution before moving forward in this manner.