About six months after Congress passed a short-term reauthorization, the National Flood Insurance Program (NFIP) expired Oct.1鈥攁 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 efforts, 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.”
Related: Viewpoint: The Imperative of Long-Term NFIP Reform
Jimi Grande, senior vice president of federal and political affairs 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 鈥� from failing to maintain adequate flood mapping to hidden subsidies that provide a false sense of security and encourage development in flood-prone areas 鈥� 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.”
Related: APCIA: Record Shows ‘Minimal Complaints’ on Hurricane Milton, Helene Claims
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鈥攎any from hurricanes Helene and Milton in 2024. FEMA said losses from 2024 “depleted the NFIP’s funds generated from premiums to pay claims.”
Related: FEMA to Borrow $2B to Pay Flood Claims After Hurricanes Helene and Milton
According to the Congressional Research Service, the NFIP鈥攆unded by the premiums it collects for flood insurance policies鈥攈ad $615 million on hand as of Jan. 25 to pay claims.
Photo: Buildings and homes are flooded in the aftermath of Hurricane Laura near Lake Charles, La. in 2020. (AP Photo/David J. Phillip, File)
Topics Flood
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