Congress granted a one-year extension for the National Flood Insurance Program, which was set to expire Sept. 30.
The federally provided flood insurance offers the only coverage against floods for roughly 5.5 million homes and businesses in the United States. Standard home insurance policies do not cover flooding.
The U.S. House of Representatives passed the bipartisan Senate bill Sept. 23. It authorized the extension of the flood program through Sept. 30, 2011. Meanwhile, Congress will consider long-term reform measures to put the indebted program in the black.
The program, administered by the Federal Emergency Management Agency (FEMA), operated under a series of short-term extensions since 2008. It lapsed four times this year. During the lapses, new policies could not be written, which delayed thousands of real estate transactions. Lenders require mortgage applicants to have flood insurance if the property they're buying is in flood-prone areas.
Insurance trade groups applauded the extension but called for a long-term solution.
"While we are pleased that Congress passed the one-year extension, there is still work to be done in the 112th Congress," David Sampson, president and CEO of the Property Casualty Insurers Association of America, said in a media statement. "With over $18 billion in debt, the NFIP is a program that needs meaningful reform and a long-term reauthorization."