By Chad Hemenway Insurance Journal
Update: National Flood Insurance Program Expires
About six months after Congress passed a short-term reauthorization, the National Flood Insurance
Program (NFIP) expired Oct.1—a prospect that will cause coverage lapses for policyholders with expiring
contracts at the traditional height of hurricane season, and major problems for real estate transactions.
Components of NFIP were set to cease when September ended, just as a polarized Congress could not
come to terms on a federal budget, which also faced an Oct. 1 deadline.
Editor’s Note: This story, originally published Sept. 25, was updated Oct. 1 to reflect that NFIP has
expired.
With the lapse, the Federal Emergency Management Agency (FEMA), administrator of NFIP, will still make
sure valid claims were paid with available funds. However, no new policies will be sold, according to
FEMA’s website. Expiring policies will not renewed.
About 1,300 property sales per day and about 40,000 closings per month are impacted, according to the
National Association of Realtors (NAR). In a letter to lawmakers earlier this month, NAR recommended a
long-term reauthorization of NFIP with reforms to include improved flood maps, mitigation eorts, and
policy pricing. According to its research, NAR said NFIP supports about 500,000 home sales annually.
The prospect of any long-term thinking before Oct. 1 on the matter of federal flood insurance was unlikely
under the circumstances, but the insurance industry and state legislators urged a reauthorization before
the program’s deadline.
“Congress must act swiftly to prevent any lapse in the NFIP, particularly as we enter the height of
hurricane season,” said New York Assemblywoman Pamela Hunter, president of the National Conference
of Insurance Legislators (NCOIL) days before the program’s expiration date. “A long-term reauthorization
is overdue, but in the meantime, we cannot risk leaving families, businesses, and communities
vulnerable.
“The NFIP provides critical stability for policyholders and insurers alike, and it is essential that Congress
comes together to deliver lasting reforms and ensure continued protection for those who need it most.”
Jimi Grande, senior vice president of federal and political aairs for the National Association of Mutual
Insurance Companies (NAMIC) said before Oct. 1 that “Congress cannot allow” the expiration of NFIP
policies at the peak of hurricane season.
“Everyone agrees the NFIP is in dire need of reform, and NAMIC will be an active participant in those
conversations,” but Congress needed to “first ensure that homeowners have the protection they need at
such a pivotal time,” Grande added.
On Oct. 1, NAMIC president and CEO Neil Alldredge said, “There are two full months between today and
the end of Hurricane season, and every day more and more Americans will be needlessly put at risk of
losing everything in a flood. We cannot allow this to happen.”
“Decades of poor policy decisions – from failing to maintain adequate flood mapping to hidden subsidies
that provide a false sense of security and encourage development in flood-prone areas – have put
millions of Americans in the path of floodwaters,” Alldredge added. “Many of them, though not enough,
wisely chose to protect themselves by purchasing flood insurance through the NFIP. They should not be
put at risk because Congress cannot do its job.”
The American Property Casualty Insurance Association (APCIA) also called on Congress to extend the
federal insurance program to “ensure that new home mortgages can close and policyholders can
continue protecting their largest financial investment,” said Sam Whitfield, senior vice president of
federal government relations. APCIA has been in favor of a long-term authorization of NFIP.
“When Congress slashes funding, communities pay the price and families across the country face higher
costs and fewer insurance options,” added Lizzy Price, a spokesperson for the Insurance Fairness
Project, in an Oct. 1 statement. “The NFIP lapse adds fuel to an already escalating insurance crisis driven
by climate change.”
NFIP has been reauthorized more than 30 times since 2017. The latest was in March 2025, shortly after
FEMA borrowed $2 billion from the U.S. Treasury to cover NFIP claims—many from hurricanes Helene
and Milton in 2024. FEMA said losses from 2024 “depleted the NFIP’s funds generated from premiums to
pay claims.”
According to the Congressional Research Service, the NFIP—funded by the premiums it collects for flood
insurance policies—had $615 million on hand as of Jan. 25 to pay claims.
Flooding_of_the_Guadalupe_River_near_Kerrville,_Texas_in_2025.jpg
