About six months after Congress passed a short-term reauthorization, the National Flood Insurance Program (NFIP) will soon expire—a prospect that could 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 will cease when September ends, just as a polarized Congress threatens a government shutdown over the federal budget, which also faces an Oct 1 deadline.
In the event of a lapse, the Federal Emergency Management Agency (FEMA), administrator of NFIP, would still make sure valid claims were paid with available funds. However, no new policies would be sold, according to FEMA’s website.
About 1,300 property sales per day and about 40,000 closings per month would be 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 seems unlikely under the circumstances, but the insurance industry and state legislators urge 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). “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 National Association of Mutual Insurance Companies (NAMIC) said “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 as the government runs up against a shutdown, Congress must first ensure that homeowners have the protection they need at such a pivotal time.,” he said.
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.
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—many 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—funded by the premiums it collects for flood insurance policies—had $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)
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