No Deal: NFIP Lapses as Government Shutdown Begins
A partial federal government shutdown began on Oct. 1 after Congress failed to agree on a new funding deal for the 2026 fiscal year. This has resulted in a lapse of National Flood Insurance Program (NFIP) authority.
The Federal Emergency Management Agency (FEMA), which manages the NFIP, has historically sent out a version of this memo—from December 2024—when the program lapses. However, the agency has not yet issued new guidance.
FEMA still has the authority to ensure the payment of valid claims with the funds it has on hand. Existing policies are allowed to remain in effect until they expire—the renewal date plus a 30-day grace period.
Agent Toolkit: Combat Legal System Abuse
Renewal of policies is allowed if the application was received before Sept. 30 and the premium is received within the 30-day grace period. All other renewals must wait for reauthorization by Congress.
Additionally, the federal government’s requirement to purchase flood insurance if the property is in a flood zone is suspended and lenders can decide whether to make loans in flood hazard zones. Private flood insurance may be available for policyholders if the lender decides that coverage is needed.
A broad coalition of organizations representing the insurance, real estate and banking industries sent a letter to congressional leaders earlier this week, urging quick action to extend the NFIP. The Big “I” will continue to advocate for NFIP reauthorization, either through a continuing resolution or another avenue.
The Big “I” will continue to update members through the News & Views e-newsletter on the status of government funding and the NFIP.
Raaed Haddad is Big “I” director of federal government affairs.
News Types
Agency Management Solutions
Insurance Markets
Big I Programs
This month’s issue
The October issue is out now!
