The federal government just threatened to suspend the flood insurance of homeowners right in the path of Hurricane Irma, according to DCReport.
The Federal Emergency Management Agency (FEMA) quietly posted today that some communities – including Daytona Beach, FL – are scheduled to lose their flood insurance by the end of the month for being in noncompliance with the floodplain management requirements of the National Flood Insurance Program (NFIP).
Homeowners must now hope their counties can comply with the policy requirements by Sept. 29, or else risk losing the federal flood insurance that most private insurance providers do not offer, perhaps permanently. (Once an area’s federal flood insurance is suspended, it can’t be renewed.) These communities would also lose vital federal financial aid allotted for construction projects in flood-damaged communities.
Should this happen, homebuyers can expect more mortgage delays and higher home prices after losing this safety net. FEMA has sent a six-month, 90-day, and now one-month notification letter informing the communities of their imminent suspension.
These demands largely stem from money troubles in the National Flood Insurance Program (NFIP). The NFIP is still struggling with a $25 billion debt to the U.S. Treasury after the massively expensive Hurricanes Katrina and Rita in 2005 and Superstorm Sandy in 2012. FEMA itself was slated to run out of money before Irma hits the U.S. mainland until Congress approved a plan today to send $7.4 billion to its disaster relief fund, and $450 million to the Small Business Administration’s disaster loan program.
Exacerbating matters, President Trump has proposed massive cuts to the NFIP’s budget, – potentially as much as $190 million a year – and may defund the program completely.
Meanwhile, hurricane season won’t even hit its peak for another four days, and the U.S. has already grappled with two of the most powerful hurricanes in its history, with Tropical Storm Jose expected to become a hurricane later today. Hurricane season doesn’t end completely until November 30.