Saturday, September 27, 2008

With another two months remaining in hurricane season, flood insurance remains paramount to protection for homeowners in the Florida Keys.

But federal lawmakers have waited until the last possible moment to reauthorize the National Flood Insurance Program, which is scheduled to expire Tuesday, meaning no federally backed flood policies could be written or renewed after that.

Legislators in the U.S. Senate and House of Representatives are hashing out a revised flood insurance program, but are at odds over whether to include wind protection in the policies.

The House supports the increased coverage despite threats of a presidential veto, while the Senate does not.

Short of a compromise or eleventh-hour extension of the current program, consequences could be dire.

The freeze on policies would have a dramatic effect on the mortgage and real estate market, because in areas vulnerable to floods, homeowners cannot get mortgages without flood insurance.

The majority of Florida Keys homeowners have flood insurance policies through the NFIP, as very few private insurance companies will write flood policies for the Keys and those that do are significantly more expensive.

The NFIP provides government-subsidized flood insurance to more than 20,000 communities in the country, but, "As of Monday, no one is going to be able to buy or renew their flood insurance policies," said Elizabeth Freeman, owner and agent of Porter-Allen Insurance Company in Key West.

In South Florida, the NFIP has 1.05 million policies in effect, according to data from the NFIP Web site. Statewide, there are more than 2 million NFIP policies. Those already in place will be valid until their scheduled date of expiration, but if Congress has taken no action by then, those policies could not be renewed.

"But with so much going on with the banks and the rest of the economy, I hope the lawmakers are aware of the severity of the situation," Freeman said Friday.

U.S. Rep. Ileana Ros-Lehtinen, R-Miami, whose district includes the Florida Keys, voted in support of the House bill that includes expanded coverage, "in spite of a veto threat by the administration," said Sarah Gamino, the Ros-Lehtinen's legislative director.

"She would love to see the stronger of the two bills pass, especially in light of its effect on Keys homeowners," said Gamino, who added that a temporary extension of the existing program is likely. "Because without the extension, you'd be preventing federally backed mortgage companies from closing on homes."

mbolen@keysnews.com