The clock is ticking on the National Flood Insurance Program—again.
The NFIP is part of the federal funding package, which is set to expire at the end of Jan. 30. Unless Congress compromises on s
everal issues, namely funding for the Department of Homeland Security, the NFIP will be among a group of agencies set to lapse.
A lapse would mean no new federal flood insurance policies sold or renewed. The Federal Emergency Management Agency (FEMA), administrator of NFIP, will still make payments for claims using available funds.
NFIP was reauthorized until the end of this month when federal lawmakers ended a 43-day government shutdown mid-November 2025.
The good news is, reports are circulating that Republicans and Democrats are possibly moving toward a deal on the federal budget to avoid another shutdown, which would reauthorize NFIP once again. The program has b
een reauthorized more than 30 times since 2017. Prior to its most recent reauthorization, NFIP was reauthorized 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. At the time, 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
Prior to the government shutdown last October, organizations representing insurance and multiple other industries sent a letter to Congress to urge action on NFIP, including a longer-term reauthorization.
“Americans deserve certainty and stability in the flood insurance marketplace so that they can protect their homes, businesse
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s and loved ones,” the organizations said in the letter to leaders of the House and Senate. The American Property Casualty Insurance Association, National Association of Mu
tual Insurance Companies, The Council of Insurance Agents and Brokers, Independent Insurance Agents & Brokers of America, R
einsurance Association of America, and Wholesale & Specialty Insurance Association signed the letter.
Sam Whitfield, APCIA’s senior vice president of federal government relations and political engagement, said it is pushing for extension until Sept. 30.
“Homeowners can’t afford another lapse in the NFIP,” he said. “When the NFIP expired last year, homebuyers were stuck, real estate deals stalled, and an estimated 1,300 home sale
s a day were disrupted. Congress must act now to ensure uninterrupted flood coverage for millions of families and keep housing markets stable.”