How the government shutdown is affecting NC flood insurance

RALEIGH, N.C. (WNCN) -- While we still have more than a month left in hurricane season, October historically is the third busiest month for the storms.

On top of that, the federal government shutdown is making it difficult for some homeowners looking to add or renew their flood insurance policies.

North Carolina Insurance Commissioner Mike Causey says this includes issues with starting a new policy or even renewing one.

"Well, it affects the national flood insurance program more so than the overall insurance industry," Causey told CBS 17 News on Tuesday.

The National Flood Insurance Program is through FEMA.

"Right now, in the midst of this government shutdown, the National Flood Insurance Program cannot issue new policies or they cannot renew policies," said Causey. "You can submit a claim, and they all pay the claim as long as there's funds available. But if those funds run out, then it may cause a delay. So, if you have a claim I'd get it submitted as soon as possible."

Flood insurance is required for homes in high-risk flood zones, with federally-backed loans. Causey says that with the national flood insurance program currently unable to issue new policies, consumers may have to look elsewhere.

"You won't be able to close unless you have flood insurance. so, you'd have to go to the private route," he said.

"I just encourage people that if you are in the process of buying a flood policy or if you've got one coming up for renewal, make sure you contact your insurance agent right away to see what your options are," Causey told CBS 17 News.

Mary Hann, head of sales for Guardian Service, an independent insurance agency in Raleigh, tells CBS 17 the government shutdown might slow the home-buying process for consumers.

"It could slow home purchase, for example, because that insurance is required to get a mortgage on a home in the floodplain. Those people can go to private carriers for insurance, but those policies tend to be more expensive. They also may have moratoriums around storms and that type of thing," Hann said. "For where I actually feel like this is more concerning is on existing policies, where if your renewal period is during the government shutdown, you'll see a lapse in coverage because they can't renew your plan despite the fact that you've been paying on time."

CBS 17 reached out to FEMA regarding this. CBS 17 received what appeared like an automated response from FEMA's media team for a separate inquiry on Monday. That email said in part, "We are out of the office starting Oct. 1, due to the federal funding hiatus."

Commissioner Causey wanted to make it clear that normal homeowner's insurance is not flood insurance.

He says anyone with questions can contact his office.

"I'd say people have questions every day about insurance policies. The Department of Insurance is here to help. That's what we do. We help people when they have a question, whether it's homeowner's automobile insurance or health insurance or Medicare supplements. And go to our website NCDOI.GOV, you can give us a call. We have people on the phones Monday through Friday, 8 to 5, to take your calls."