Flooding across the United States in 2025 caused more than 130 fatalities in the Texas Hill Country alone and billions of dollars in insured losses, yet fewer than 1% of households in some of the hardest-hit communities carried flood insurance, the Insurance Information Institute (Triple-I) said in its latest issues brief.
AccuWeather estimated that seven major weather disasters resulted in $378 billion to $424 billion in total damage nationwide in 2025. The Texas Hill Country flash floods alone were pegged at $18 billion to $22 billion.
Cotality offered a narrower, insurance-focused estimate of $1.1 billion in residential building damage from the Texas event, with the NFIP expected to cover just $135 million – a gap that underscores the scale of insured losses left unrecovered.
The Triple-I noted that many homeowners consider flood insurance unnecessary unless required by a mortgage lender, and some drop policies once their mortgage is paid off. A 2023 survey by Munich Re and Triple-I found 64% of homeowners believed their homes were not at risk.
More than half of flood insurance policyholders are covered through FEMA's National Flood Insurance Program (NFIP), which provides about $1.3 trillion in coverage to nearly 4.7 million policyholders.
Private insurers have expanded their presence, with private flood insurance growing nearly 43% between 2016 and 2024 – from $3.29 billion in direct premiums to $4.7 billion.
A bipartisan bill in Congress – the Continuous Coverage for Flood Insurance Act – would direct FEMA to treat compliant private policies as satisfying the NFIP's continuous coverage requirement.
The NFIP carries $22.5 billion in debt to the US Treasury, with $7.9 billion in remaining borrowing authority, Congressional Research Service data showed. Over the past 50 years, FEMA collected $60 billion in premiums but paid $96 billion in costs, the Peter G. Peterson Foundation reported, noting the program ran an annual deficit of roughly $1.4 billion.
The program's authorization lapsed for 43 days during the government shutdown in late 2025, stalling issuance and renewals and affecting an estimated 1,300 home sales per day. Congress has since extended authorization to September 30, 2026 – the 34th short-term reauthorization since fiscal year 2017.
FEMA's Risk Rating 2.0, fully implemented in April 2023, has added further pressure. The GAO estimated it will take until 2037 to phase in full-risk rates.
A December 2025 study found the resulting premium increases substantially reduced NFIP uptake, with steep declines in lower-income communities.
Triple-I CEO Sean Kevelighan described flooding as a collective challenge, saying that investing in flood insurance and mitigation "can dramatically reduce the human and economic costs of tomorrow's disasters."
The NFIP's Community Rating System offers premium discounts of up to 45% for communities exceeding minimum floodplain management standards. Research cited by Triple-I found resilience investments save up to $33 in avoided costs for every $1 spent.
