Homeowners may be left without flood insurance

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The oceans are rising, storms are getting stronger, and periods of torrential rainfall are becoming more frequent. Having good flood insurance is more important than ever, but the National Flood Insurance Program (NFIP) will expire at the end of the month, leaving Rhode Islanders in the lurch with no way to sell or protect their homes. 

“Right now anyone who lives in a flood zone requires flood insurance to get a mortgage, and if the insurance falls through, you won’t be able to buy or sell a house,” said Joe Luca, the president of the Rhode Island Association of Realtors. “It’s not just millionaires who live in big fancy houses on the coast, it’s (impacting) regular working class Rhode Islanders who live in a flood zone.”

Luca said that 40,000 real estate closings a month will be affected if NFIP falls through, as homeowners won’t be able to get the flood insurance that the terms of their mortgage requires.

If the program is not renewed by July 30, homeowners who currently have flood insurance will still be covered for the duration of their policy, usually one year, and any claims they make will be paid out thorough remaining NFIP funds, but according to the NFIP website, once the program expires homeowners will not be able to renew their flood insurance or acquire a new policy. As the only flood insurer is the government, if the government program shutters there won’t be any way to get flood insurance at all.

NFIP was founded in 1968 through the National Flood Insurance Act of 1968. Before NFIP flood insurance had been a part of homeowners insurance, but after increasing claims, private insurers decided to exclude flood insurance from the homeowners package. Soon even separate flood insurance became too expensive for private insurers to cover, and so the federal government stepped in during 1968. 

Since then the program has gone through a number of changes, but in the current iteration the federal government is the only insurer, with private insurers cut out of the market completely. Flood insurance is mandatory before a mortgage can be acquired for a home in a flood zone. 

As of May more than five million homes were insured nationwide through NFIP, with 13,000 of them in Rhode Island. 

In Warwick some of the areas susceptible to floods are near the Pawtuxet River, Warwick Neck, Oakland Beach, and Conimicut according to the flood maps done by the Federal Emergency Management Agency, FEMA. In Warwick there are 1,443 homes with flood insurance, insuring more than $320 million in property value.  

NFIP is set to expire July 30, unless Congress extends the program, something it’s done six times since last September. A number of different bills are before Congress to reauthorize and reform the program, but with the current level of political polarization, an extension is no sure thing.  

According to a statement from Senator Jack Reed’s office “Congress needs to work together to provide a comprehensive, long-term reauthorization that will ensure property owners know their flood risk and have an appropriately priced but affordable way to insure against it, as well as options and incentives to mitigate their risk.”

Reed has endorsed a number of different legislative initiatives while trying to revamp NFIP. He introduced a bipartisan bill, the State Flood Mitigation Revolving Fund Act of 2017, which would give FEMA the power to grant revolving loans to states to help mitigate flood insurance and risk. He’s sponsored other bills that either seek to extend the program or reform it. 

But there’s still concern that no bill will be passed and homeowners will be left high and dry. Because of the current NFIP stipulation that a home needs flood insurance before a buyer can get a mortgage, if NFIP lapses then thousands of home sellers won’t be able to find buyers. 

According to the statement from Reed’s office, “Senator Reed hopes work on at least one of these measures, with a simple extension of the flood insurance program, can be completed before the end of the month or that a free-standing flood insurance extension can be adopted.”

Other Rhode Island legislators also understand the pressures and importance of NFIP. 

“We need to find a path forward that does not overburden homeowners, puts the federal flood insurance program on solid financial ground, implements rates that reflect more accurate flood mapping, and accurately predicts emerging hazards like sea level rise,” said Senator Sheldon Whitehouse. 

“We need to make sure the program works for everyone, not just millionaires and billionaires,” said Rep. David Cicilline. “I’ve opposed flood insurance bills that Republicans wrote on their own because they increased premium costs for middle class policyholders.”

“The congressman understands the needs of the flood program and understands that it’s important to Rhode Island,” said Stuart Malec, Rep. Jim Langevin’s press secretary. 

A longer-term solution to fix NFIP is unclear. NFIP is under such a mountain of debt due to claims tied to Hurricanes Maria, Irma, and Harvey, that last October Congress had to pass a bill to forgive $16 billion in deficits that the program had accumulated.  

Currently premiums are too low to cover flood claims, and with another hurricane season coming it’s unclear as to how much longer the program can stay afloat, even if it’s extended past July 30. 

For some the problem lies in the maps used by FEMA to define areas in flood zones. 

“We would like Congress to not only reauthorize the program but to revamp, and update the maps,” said Luca. “They need to get good data.”

For others, the key is to open the market to private insurers, allowing the free-market to play a role in reducing costs. 

But for now homeowners are left waiting, unclear for what the future holds.

Comments

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richardcorrente

Dear homeowners,

Flood insurance rate have been skyrocketing. Many insurance companies have few or no carriers. My recommendation, as a mortgage loan officer for over 40 years, is to go on the internet and google "cheap flood insurance". You will see many carriers, including some that your insurance person might not be signed up with. Believe it or not, Lloyds of London is in this space and their rates are sometimes the lowest. Do your own research and let your insurance person know what you found. You might be doing him/her a huge favor, that could save other insurance clients a lot of money and that should earn you preferential treatment and gratitude.

Take good care.

Rick Corrente

Tuesday, July 24
CrickeeRaven

The above comment was made by a losing mayoral candidate who no longer resides at a property where he failed to pay property taxes since 2014, so any financial advice he offers is, at best, suspect.

It is also highly doubtful that homeowners need his help using internet search engines -- or appreciate his clear attempt to use this website for free commercial advertising.

Residents living near flood-prone areas already have enough to be concerned about without having a soon-to-be twice-failed candidate give his unwelcome advice.

Tuesday, July 24
richardcorrente

Dear readers,

CrickeeRaven lied...again.

I sued my lender in Federal Court for breaking R.I. Law and I won! Got that CrickeeRaven, I WON! My lender was court-ordered to pay my taxes AND THEY DID! The even better news is that they paid my taxes late and Warwick got even MORE money. There were over 1,000 plaintiffs in this class action and WE WON!!!

I am suggesting that anyone who has a flood insurance need to look on the internet. If they do, they will learn that there are many options available that their insurance agent might not be aware of.

If CrickeeRaven prefers not to, that is just fine with me.

Happy Summer everyone.

Rick Corrente

The Taxpayers Mayor

Tuesday, July 24
richardcorrente

And if I didn't pay my taxes "since 2014" as CrickeeRaven claimed, how come no one has come after me? How come Mayor Avedisian and acting Mayor Solomon haven't said a word? The reason is, CrickeeRaven lied...again. My taxes are paid in full.

Happy Summer, again, everyone.

Rick Corrente

The Taxpayers Mayor

Tuesday, July 24
Justanidiot

tank youse for the goolgled hint. did youse know that you can tipe in almost anything and find out whats going on on the interwebs. i typed in master mayer and OUR master mayer pooped up. wow. tank your for dis greats place. maybes you and eyes could by some stalk in dat company. i bet it will go places.

Tuesday, July 24
CrickeeRaven

"My lender was court-ordered to pay my taxes AND THEY DID!"

This is a lie. A review of the city tax collector's website at the following link, and using the address 177 Grand View, shows that since 2014, three other parties [not the make-believe mayor and not his mortgage lender] paid the taxes on that property: Clayton Shackleton, Red Stick Acquisitions, and Dr. William Masopust: https://www.citizenselfservice.com/MSSProd/citizens/RealEstate/Default.aspx?mode=new

"The even better news is that they paid my taxes late and Warwick got even MORE money."

Here, the make-believe mayor is trying to take credit for late tax payments made by his mortgage lender -- when, in fact, his mortgage lender is not listed as paying the taxes at all, and the three other parties who paid the property taxes also paid interest and fees in these amounts:

2014: $892.08

2015: $796.56

2016: $850.68

2017: $331.63

2018: $0.

Altogether, the city received $2,870.95 in addition to the tax payments that the make-believe mayor did not make -- and here he is, pathetically trying to spin it as a positive.

"[H]ow come no one has come after me?

As long as the taxes were paid -- regardless of who paid them -- the city would not "come after" the make-believe mayor.

"My taxes are paid in full."

As shown at the above link, the taxes were paid by other people, including the current landlord of the make-believe mayor's business office, for which he paid the same person $4,000 in campaign funds in 2016.

"CrickeeRaven lied...again."

No, it is the make-believe mayor who has repeatedly lied in the face of factual, easily-verifiable public information about his tax delinquency -- and has yet to answer why he is no longer reporting his former residence [which he admitted losing to tax sale] as his address and is instead living at 2194 Warwick Ave.: https://bit.ly/2H01wNz

Tuesday, July 24
Scal1024

Readers, I'm not sure I would be taking financial advice from Rick Corrente. His noted tax delinquency on his property and car taxes over the last 10 years is a record of embarrassment and missed payments. The sickening part is that Rick Corrente still lies about these things, when the information is public knowledge. The lying has become pathological as this erratic, failure of a candidate gets even more desperate than he's been. Then again, I guess thats what happens when you take up 4 years, waste $40,000 and get clobbered in the election. Tone deaf isn't the word for that level of ignorance. It shows how desperate the unraveling Corrente campaign has become.

Rick Corrente wants to cut rebate checks to new homebuyers. He says "new homebuyers= new taxes". When a home is for sale the property taxes are still being paid on that home. There is no loss of taxes to the city. Rick Corrente is actually advocating writing a check to new homebuyers when those taxes are being collected whether they buy the home or not. All this program is, is a hole in the budget for no apparent reason. How does a "mortgage guy" not know how property taxes work? Probably because he doesn't pay them.

Rick advocates a voluntary pension buyout. If an employee makes $40,000 a year in retirement, and they retire at 60 years old. How much $ do you think it would cost to convince that person to opt out of their pension? They are already receiving $40,000 a year (not including medical closer to $30,000 a year), it would cost a fortune to convince that employee to opt out of that pension. That is just 1 employee. Start doing the math across the entire city and the money isn't there. Another Corrente idea that when looked at closely FAILS.

No reader should be lectured on how to look up flood insurance by a candidate who struggles to pay his taxes on time and lies to voters about it. Rick makes excuses about suing his lender, without ever offering a shred of proof. Rick you blame your lender for your failure on property taxes. Who's fault is it for your consistent decade long car tax delinquency? I notice a pattern with Rick Corrente and that is its always someone else's fault. It's his lenders fault he couldn't pay his property taxes for years not his own failure as a man, it's the "PAC moneys" fault he got crushed in the 2016 General Election (even though he still claims moral victory, so which is it?) He's already blaming the "political insiders" aka PEOPLE HE'S SOUGHT ENDORSEMENTS FROM SINCE 2016 if he loses in the Democratic Primary, not the fact he is a dishonest, flawed, tax delinquent squatter that voters have consistently rejected (after 4 years and $40,000). I'm assuming Rick Corrente will blame somebody else for his decade of car tax delinquency because thats the type of character and integrity he has. ZERO. Voters deserve a candidate who understands the struggles of paying their taxes while also paying their water and sewer bills, those are 2 things Rick Corrente knows nothing about. I know what group he should be blaming in this year's primary...voters. They will once again say no thank you to this wind bag, fraud.

Tuesday, July 24
WwkVoter

And on another note, my smartphone widget says 49 Days, 23 Hours, 42 Minutes, 38 Seconts... until polls close on Primary day.

The name of this widget app is "Final Countdown".

Have a great "Thread The Needle Day" (July 25) Everybody!

Tuesday, July 24
CrickeeRaven

Scal, it's always been so easy to disprove the make-believe mayor's statements, and that's because he, himself, has made his defects as a candidate so blatantly obvious.

You rightly point out that voters do care about a candidate's character -- and that the make-believe mayor is clearly lacking in this regard. Someone who has failed so miserably at paying his taxes or showing any understanding about how the city budget works simply doesn't deserve election to any office.

Thursday, July 26