A group of state insurance commissioners is urging Congress to approve a long-term extension of the National Flood Insurance Program (NFIP) and to implement measures that would encourage growth in the private flood insurance market.
The recommendations were presented during a Federal Emergency Management Agency (FEMA) Review Council meeting held at the White House.
The commissioners said that a long-term reauthorization of the NFIP would provide stability for policyholders and called for the program to be extended for at least 10 years. They also pressed FEMA to improve the accuracy of flood maps and discussed support for mitigation initiatives, including premium discounts for resilient construction, tax-preferred savings for mitigation projects, and parity for state mitigation grants.
North Dakota Insurance Commissioner Jon Godfread (pictured above, left), who serves as president of the National Association of Insurance Commissioners (NAIC), said in a statement, “As we help consumers prepare for severe weather, reduce their risk and speed recovery, state insurance regulators are committed to expanding access to flood insurance through both the NFIP and private coverage.”
Godfread attended the event alongside regulators from California, Florida, Louisiana, Texas, Alaska, Virginia, and New Jersey.
The coalition also recommended that private flood insurance policies be recognized as providing continuous coverage. This change would allow consumers to return to the NFIP without penalty.
Under current rules, policyholders who let their NFIP coverage lapse, either by nonpayment or by switching to the private market, lose federal subsidies. The commissioners suggested that the NFIP should allow policyholders to leave midterm and receive a prorated refund if they move to private coverage.
The group further recommended that Congress allow FEMA to share NFIP data with insurers, regulators, modelers, and rating organizations. They said that broader data sharing would improve the accuracy of risk profiles, pricing, and underwriting.
Louisiana Insurance Commissioner Tim Temple (pictured above, right) highlighted the importance of the NFIP for his state, noting that Louisiana accounts for 9% of all NFIP policies, with about 419,000 policyholders.
“Louisiana knows firsthand the devastating impact of floods and hurricanes, and we also know the importance of having affordable, reliable insurance coverage,” Temple said. “Reforming FEMA and the NFIP is not just necessary — it is overdue.”
The commissioners’ call for an extension came as the NFIP’s authority lapsed due to a government shutdown, halting new policies and renewals and leaving millions of property owners and thousands of real estate transactions in limbo.
According to the Insurance Information Institute, about 1,300 real estate closings per day require flood coverage in Special Flood Hazard Areas, and many of those transactions could stall without the ability to secure NFIP coverage. FEMA’s borrowing authority has also dropped from $30.4 billion to $1 billion during the shutdown, which could limit its ability to pay new NFIP claims after severe weather events.
Industry leaders have warned that prolonged disruption could delay disaster response resources, freeze flood mapping and mitigation grants, and disrupt up to 40,000 real estate closings per month. The shutdown has also complicated compliance with federal flood insurance mandates, as lenders must decide whether to proceed with mortgage transactions in flood zones without coverage in place.
In addition to the immediate impacts of the shutdown, a bipartisan bill in the US House of Representatives seeks to overhaul FEMA’s flood maps, requiring updates every five years and the inclusion of more detailed geographic and structural data.
The legislation aims to improve the accuracy and accessibility of flood risk information, which industry groups say is essential for effective risk management and disaster prevention.
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