President Barack Obama is expected to sign a bill this week that would, among other things, extend the National Flood Insurance Program five years.
The program was set to expire July 31 — during hurricane season — and a lapse would have prevented potential homeowners in flood-prone areas from closing on their mortgages. Since 2008, Congress only approved short-term extensions in part because of disagreements about rate hikes to offset the program's $18 billion debt.
That changed June 29 when both the House and Senate passed a transportation bill that includes a measure extending the flood insurance program until Sept. 31, 2013 and making it more financially sound.
The legislation would raise the cap on premium hikes to 20 percent a year, from 10 percent a year. That means a premium of $1,000 a year could more than double in four years as the increases compound. The bill would also allow increases of 25 percent a year for certain properties such as vacation homes or homes with repeated claims and it would set minimum deductibles of $1,000 to $2,000, depending on age the home and the amount of coverage.
More than a third of the flood insurance program's 5.6 million policies are in Florida.