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.

Between mortgage payments, credit card payments, groceries, and gas, trimming a dollar here and there can prove to be necessary. As you look over your finances and budgets to determine which expense can be cut and which luxury can disappear take a quick look at your car insurance.

Insurance is an important item that is certainly a necessity. In many states and areas, insurance is required by law so your policy is not really something you can just completely do away with. However, you can trim the policy to its bare bones saving you some much needed money.

The San Jose Mercury News newspaper has published an editorial saying that current government efforts to solve the nation’s housing crisis simply won’t get the job done.

The newspaper noted that the feds have been encouraging mortgage companies to do what they can to prevent home foreclosures by renegotiating difficult loans. However, as the newspaper states, the voluntary campaign hasn’t worked so far.