The Real Deal Miami

Senate committee saves flood insurance program, Florida real estate market

September 12, 2011 02:33PM

A Senate committee approved legislation to extend the National Flood Insurance Program, whose existence is closely tied to the Florida real estate market. In flood-prone areas such as Florida, where more than one-third of all U.S. flood insurance customers reside, most lenders require potential homebuyers to purchase flood insurance. But the program is $18 billion in the red, and critics in the Senate do not want to subsidize the program. As a result, the bill that was approved calls for annual rate hikes of up to 15 percent. The current incarnation of the program expires Sept. 30 and needs full Senate approval. The program expired four separate times last year, wreaking havoc on the local sales market. [Sun Sentinel]