You might live in an area of the United States that makes it unlikely that you will ever see a flood but for some along the east coast, flood insurance may now get a second look. Until hurricane Irene devastated North Carolina through Maine, flood insurance was barely considered as a necessity. What many don’t know is that flood insurance predominantly comes from the Federal Government and like most programs where Washington is involved, it is plagued with budgetary problems and differing ideas of how fix the program. If you have flood insurance, your coverage may be at risk and if you are considering coverage, this program may not be available to you in future years if the program’s balance sheet isn’t shored up. Let’s take a look at what you need to know about the Federal flood insurance program. The Program Traditional homeowner’s insurance doesn’t cover damage from floods. In 1968, Congress approved the creation of the National Flood Insurance Program, a program available to any resident who resides in a locality where the local government has agreed to enact zoning standards that meet or exceed guidelines set by the Federal Emergency Management Agency, the administrator of the program. FEMA works with 90 private insurance companies to issue this coverage. Currently, 5.6 million homes have insurance through the National Flood Insurance Program with 630,000 of those in New Jersey, New York, North Carolina, and Virginia, states hardest hit by Hurricane Irene. Most of the other policies are in effect in coastal states like California, Texas, Florida, and Louisiana. The Cost Most homeowners pay around $600 each year for flood insurance but with the program currently $18 billion in debt, the premium is too small according to lawmakers. A House bill wants to reauthorize the program and add 20% to the annual premium. A competing Senate bill would add 15%. Some politicians, especially those in coastal states believe that the in a struggling economy adding up to 20% to the flood insurance premium is too much. They argue that because Hurricane Irene struck an area that rarely sees such large scale flooding, many more east coast homes will enroll in the flood insurance program which allow more capital to enter the system. Private Insurance Although one would believe that private insurers would want to be more directly involved in the flood insurance programs, they are actually some of the program’s most powerful lobbyists. If the program fails, state regulators may require private insurers to provide flood insurance. Since insurance companies don’t believe they can make a profit by offering flood insurance, it is in their best interest to encourage this program. What this Means for You If you’re looking for flood insurance, this still remains the best and for most, the only flood insurance available. Like most government programs, Congress is likely to temporarily reauthorize it and table the issue until after the 2012 elections. For now, this program doesn’t appear to be in danger of being cut. To learn the specifics of this policy, go to floodsmart.gov . Photo by: Echosmart Related Articles: Flood damage to cars How To Save On Auto Insurance – 4 Tips Government and Finances Free federal tax filing online Making Home Affordable Mortgage Modification Program 5 ways to save money on insurance What is Private Placement Life Insurance? This article was written by a Guest Author. If you would like to write a guest post for our personal finance blog , you can find out how here . As a thank you for subscribing to our newsletter you can download our quick eBook ” 25 Ways To Save Money in 2011 ” for FREE! The articles on this site are for entertainment purposes and should not be taken as financial advice. Please contact a financial professional for specific advice regarding your situation. Also, many of the CPF articles help us pay the bills by using affiliate relationships with Amazon, Google, eBay and others. Find out more here .