A bill introduced in the U.S. Senate aims to extend the National Flood Insurance Program (NFIP) through Dec. 31, 2026. This move addresses the 32 short-term extensions the program has faced over the past decade.
The most recent extension, enacted in December 2024, is set to expire on March 14 at midnight unless Congress intervenes with new legislation or another short-term extension.
The House of Representatives passed the continuing resolution on March 11, but the Senate had not yet voted on the budget measure at the time of reporting.
Frequent short-term extensions undermine the NFIP’s ability to serve its 4.7 million policyholders, according to Louisiana Republican Senators Bill Cassidy and John Kennedy, who sponsored the bill.
Cassidy emphasized that an insurance program should provide certainty rather than face renewal every two months.
On March 13, Cassidy addressed the Senate, criticizing rising NFIP rates due to the adoption of Risk Rating 2.0.
He stressed the need to make flood insurance affordable while ensuring the program’s continuity.
If the program lapses at midnight, new policies would not be issued, and existing contracts would expire at the end of their one-year terms.
The NFIP’s borrowing capacity from the U.S. Treasury would also drop from $30.43 bn to $1 bn, according to the Congressional Research Service (CRS).
Some program functions, such as issuing Flood Mitigation Assistance Grants, would remain authorized, but losing key authorities could significantly impact the NFIP’s remaining activities.
In 2011, the largest carrier participating in the NFIP’s write-your-own program withdrew, citing administrative burdens from repeated short-term authorizations and lapses.
Private insurers handle the program’s policies through the WYO program.
Efforts to obtain comments from the Federal Emergency Management Agency (FEMA) and the Coalition for Sustainable Flood Insurance were unsuccessful.
Amid ongoing uncertainty and rising rates, several states are exploring alternatives to the NFIP. In January, Alaska introduced a bill proposing a state-based flood insurance program.
A new Senate bill seeks to extend the National Flood Insurance Program (NFIP) through December 2026, aiming to end a decade of frequent short-term extensions.
With the latest extension set to expire on March 14, lawmakers are pushing for stability amid rising rates and growing uncertainty. The bill addresses challenges posed by Risk Rating 2.0 and explores alternatives, including state-based programs.
The Federal Emergency Management Agency (FEMA) announced that Hurricane Helene could result in National Flood Insurance Program (NFIP) losses between $3.5 bn and $7 bn, including loss adjustment expenses.
Hurricane Helene caused widespread damage in the southeastern United States in late September 2024, with economic impact estimates ranging from $30.5 bn to $250 bn.
AccuWeather estimated the losses between $225 bn and $250 bn, while CoreLogic’s final figure placed flood and wind losses between $30.5 bn and $47.5 bn. Moody’s Analytics assessed damage at $20 bn to $34 bn, and The Hill reported a potential total exceeding $160 bn.
FEMA’s initial estimate covers claims from 6 states, with Florida being the most affected. By November, over 55,000 flood loss claims were reported to the NFIP, with about $830 mn already paid to policyholders.
In 2024, the U.S. Federal Emergency Management Agency (FEMA) has reinforced its dedication to enhancing the NFIP by securing $575 mn in reinsurance coverage from insurance-linked securities (ILS).
FEMA’s strategy involves paying approximately $85.7 mn in premiums for the first year of coverage, not counting initial expenses.
