Devastating floods destroyed homes and lives in Australia recently. But the bad news continues to flow in as officials say about half of the homeowners impact by the flooding in the eastern part of the country did not have insurance. According to the Herald Sun, the homeowners did not have riverine flood insurance and they may not have known that they wouldn’t be covered.

That’s why the country’s Assistant Treasurer Bill Shorten is pushing for easier-to-understand language in insurance policies. “There are a lot of views from consumers groups who are frustrated that home and content policies are hieroglyphic,” Shorten said according to the Herald Sun. He said many people don’t read their policies. “That does not make people silly … it just means the format they are submitted in is a highly inaccessible format.”

The government will assist uninsured homeowners, but Shorten wants to make sure homeowners can help themselves in the future. “It is important however the insurance industry makes it as easy as possible for people to know what they have got,” he told the Herald Sun. Even though about half of homeowners weren’t properly insured, officials say they were better prepared than many of the small businesses that were impacted by the flooding.

Iowa officials say recent flooding proves that all Iowans should consider buying flood insurance. “Earlier in the year the lieutenant governor and I were in Clarion to look at flood damage there and the important part that stood out about Clarion is there was not a river nearby,” David Miller, administrator to the Iowa Homeland Security and Emergency Management division, told Radio Iowa. “It wasn’t river flooding. It was flash flooding and runoff.” Miller told all Iowans– regardless of whether they live near a river or not– that they need to be concerned with possible flooding. “What we’re seeing is almost anybody can be affected by flooding and it’s why we’ve been really promoting involvement and joining in the National Flood Insurance Program,” he told Radio Iowa.

Recent flooding has struck the city of Ames severely. Two rivers meet there, but other cities and towns experiencing flooding aren’t near bodies of water. Governor Culver told Radio Iowa the “new normal” in the state appears to be “unprecedented” flooding. “In Ames, this is worse than ’93 and so anything that we can do in terms of flood mitigation, flood prevention — we need to make that a priority here at the capitol,” Culver told Radio Iowa.

Local insurance agents say most of their clients don’t carry flood insurance. State Farm Insurance Agent Pat Brown told the Ames Tribune that her customers only carry it if federal law requires them to. “If water seeps through basement walls or breaks the basement windows, that’s flood damage, and it’s hard for people to get their arms around that,” Brown said. Officials with the Iowa Insurance Division told the Ames Tribune that most homeowners’ policies don’t cover flood damage. “We remind people annually that one out of every four ‘flood events,’ as we call them, happens outside flood plains,” Tom Alger of the Iowa Insurance Division told the Ames Tribune.

The U.S. House of Representatives is moving closer to approving a bill that would extend the flood insurance program for five years. Called the Flood Insurance Reform Priorities Act of 2010, the bill has the support of both the Independent Insurance Agents and Brokers of America (The Big “I”) and the National Association of Professional Insurance Agents (PIA National) according to the Insurance Journal.

Once passed by the House, the Senate will need to pass the bill as well. Insurers are hoping lawmakers take out a portion of the bill that removes anti-concurrent clauses from flood policies. “The recent series of expirations and temporary extensions is negatively impacting the market,” Robert Rusbuldt, Big “I” president and CEO, told the Insurance Journal. “The Big ‘I’ commends the House for passing this bill which is a step in the right direction to a long-term extension of the NFIP [National Flood Insurance Program] and includes much-needed reforms to the critical program.”

The NFIP is currently set to expire at the end of September once again. In the past, lawmakers have extended the program five years at a time which provides stability to the insurance marketplace. Although in the past year, Congress has begun extending the program for smaller periods like a month or six months, which has made it difficult for homeowners and those in the insurance industry. “This bill contains many provisions that PIA has consistently advocated,” PIA National Director of Federal Affairs Mike Becker told House Speaker Nancy Pelosi and Minority Leader John Boehner according to the Insurance Journal. “Perhaps most significantly, H.R. 5114 extends the flood insurance program through the end of 2015. This would finally end the uncertainty that has resulted from a series of short-term NFIP reauthorizations.”

Clean up efforts continue in Nashville after record rainfall destroyed homes and created an estimated billion dollars in damage.Many residents are now waiting on word from FEMA, the Federal Emergency Management Agency, to find out what aid they’ll receive. USA Today interviewed some of the homeowners living in the worst-hit areas near the Harpeth River.

Twenty-seven-year-old Tiffany Wiggers says she doesn’t have flood insurance and, in fact, she paid $15,000 extra to be closer to the river. “Everybody on this side of the street, we paid lot premiums to be near the river: $15,000. You have to laugh to keep from crying,” Wiggers told USA Today. She says she and her  husband questioned the real estate agent, builder, lender and an insurance agent about flood insurance, but all said it wasn’t necessary. “They all said, ‘You’re not in a flood plain, so you don’t need it,’ ” recalled Wiggers for USA Today, who was taken from her home via rescue boat. “I was like, ‘FEMA and the bank said we won’t need it, so we’re in the clear.’ ”

In this area the Harpeth River, usually a gentle stream, rose to 27.3 feet. That’s three feet higher than the record which was set in 1948. Tennessee’s governor Phil Bredesen told CNN that many people don’t have flood insurance. “A lot of people who didn’t have flood insurance, because they never thought floodwaters would ever come anywhere near their home, are really looking at a total loss of their home,” Bredesen said to CNN. “It’s very tough on a lot of people right now.” President Obama has declared ten Tennessee counties disaster areas. Thankfully the forecast for this area is dry.

A congressional committee approved a bill that would overhaul the National Flood Insurance Program. This move impacts more than five million homes and businesses that are sitting in flood-prone areas, according to a Reuters report. The program had recently expired, causing issues for anyone wanting to sell or buy property in a flood zone.  Here’s a look at the changes that would happen if it is approved by the House and Senate:

• It would continue the program for five years until September 30, 2015.
• New rate maps for flood zones would be delayed. This would help homeowners facing higher insurance rates.
• The bill would also overhaul the program’s administrators so it can function more efficiently.

Democrat Maxine Waters chairs the subcommittee working on this issue and says they have figured out cost-saving methods which is important since the program has carried massive debt since the destructive 2004 and 2005 hurricane seasons. “The focus on NFIP should be on providing coverage for those vulnerable to natural disasters, not to subsidize the wealthiest Americans, so we are phasing out premium subsidies for second homes and vacation homes, which will save the program a lot of money,” Waters said in a statement according to Reuters. The House of Representatives Financial Services Committee approved the bill.

Insurance providers including Allstate, Travelers, Hartford Financial Services and Fidelity National Financial all have a big involvement in the National Flood Insurance Program. The program is administered by FEMA to provide flood coverage. They buy the coverage from about 90 companies that sell policies and collect premiums for the government. Those premiums are given to FEMA. “A long-term reauthorization of the NFIP is extremely important, especially for Americans living in flood-prone areas,” Blain Rethmeier, spokesman for the American Insurance Association, said in a Reuters report. The Independent Insurance Agents and Brokers of America, also known as Big “I”, issued a statement of support for the move. “The continued short term extensions of the NFIP have caused considerable confusion in the marketplace,” said Charles Symington, senior vice president of government affairs for the Big “I”. “We strongly support the Financial Services Committee’s efforts to pass a long term extension of this important program and hope that the full House and Senate will consider this legislation promptly.” 

Forget the economy or tough credit– if you’re selling a home in a flood zone and you need flood insurance in order to close on the purchase, you’ll have to wait. Congress wasn’t able to agree on terms for extending the National Flood Insurance Program before going to recess. That means NFIP can not issue or renew policies as of March 28. While existing policies aren’t impacted, it means sales of homes in flood prone areas are forced to tread water.

This delay has happened two other times in recent months because of political and funding delays. “I’m for continuing vital programs like flood insurance and I think we should use common sense and extend this necessary program without further increasing the federal debt,” said Sen. David Vitter to Houma Today, R-La. “Louisianians, Americans get this. Why can’t Congress?”

Congress will take up the legislation on April 12 when it returns to session. Standard homeowners insurance policies don’t cover flooding which is why the flood insurance program was created in 1968. It offers coverage from floods caused by hurricanes, overflow of rivers or lakes, rain storms, mudslides and snow melt.

Flood insurance is pretty self-explanatory, but who needs it? The answer may surprise you because the answer is almost everyone. Are you aware that flooding is the most expensive natural disaster than can happen to your home?