The federal program providing the only flood insurance available for most American homeowners is set to expire on Friday. The program owes billions to the U.S. Treasury, as a result of cumulative losses since Hurricane Katrina in 2005.
Congress is expected to pass a short-term extension, however, if the extension does not pass, the federal government would stop selling or renewing flood insurance, potentially causing the failure of thousands of home deals, as mortgage lenders require the insurance for properties in flood zones, Realtor.com reports. The federal program serves about 5.1 million households, which pay an average $1,100 a year for premiums and fees for primary residences.
“We know flooding is the most common and costly natural disaster in the United States, and it’s not getting better anytime soon,” says Laura Lightbody, who directs the Pew Charitable Trusts’ project on weather-related catastrophes. “We’ve got to face the problem head-on. These events are happening not only more frequently, but [also] in places that no one would have predicted.”
