Charting the Future of Flood Insurance
As Congress debates the National Flood Insurance Program, its long-term outlook is unclear.
From small towns to major cities, flooding is the most common weather-related disaster affecting communities across the United States.
Flooding is estimated to cost hundreds of billions of dollars annually in direct and indirect impacts. Given the magnitude and frequency of these events, flood insurance is a key component of preparedness and risk management. While the U.S. private flood insurance market is growing, the National Flood Insurance Program (NFIP) remains the primary source of coverage.
Congress established the NFIP through the National Flood Insurance Act of 1968 to enable property owners, renters, and businesses in participating communities to buy federal flood insurance for protection against losses, while requiring state and local governments to enforce floodplain management standards to reduce future damage. The Federal Emergency Management Agency (FEMA) manages the program; most policies are serviced by private insurance companies that are reimbursed through the Write Your Own Program.
Despite the NFIP’s importance, Congress has failed to pass a long-term reauthorization. Since 2017, lawmakers have enacted 35 short-term extensions, with the program currently authorized through Sept. 30, 2026.
We are seeing some signs of life, however, with the House Financial Services Committee’s Housing and Insurance Subcommittee holding a March 26 hearing on flooding costs. The panel examined increasing flood risks, discussed challenges with severe repetitive loss properties, and identified how strategic mitigation efforts can improve community readiness and reduce long-term costs for both homeowners and taxpayers.
During the hearing, Republicans floated restricting NFIP coverage for repetitive loss properties and increasing private sector participation. Specifically, Rep. Troy Downing (R-Mont.) shared proposed legislation that would prohibit newly designated severe repetitive loss properties from participating in the NFIP. He did not discuss any schedule for filing a bill.
Meanwhile, Democrats argued for a 10-year reauthorization on the grounds that private insurers are not yet capable of filling the gap left by federal programs, a concern intensified by the difficulty private insurers face in pricing risk competitively alongside NFIP rates.
There were also partisan tensions over who benefits from the NFIP. Republicans raised concerns about the program subsidizing wealthy coastal homeowners who repeatedly rebuild, while Democrats highlighted the outsized burden flooding places on low-income communities and communities of color, citing the lasting effects of redlining and criticizing the administration’s weakening of FEMA. However, members agreed on the importance of updating flood maps and the value of flood mitigation.
While additional flood insurance hearings are expected, members of Congress acknowledged that a substantive reauthorization is unlikely in this session given other pressing legislative priorities prior to the November midterm elections.
FEMA Reform
We are also monitoring the Trump administration’s efforts to reform FEMA. On Jan. 24, 2025, the president established the Federal Emergency Management Agency Review Council, calling for a “full-scale review” of FEMA operations and effectiveness and recommendations on “improvements or structural changes to promote the national interest and enable national resilience.” The Review Council held three public meetings in 2025, receiving input from the insurance sector on flood coverage issues and disaster resilience. However, the Review Council did not meet the deadline to issue its report within 180 days of its first meeting; the White House recently extended its mandate through May 29.
Additionally, on March 25, FEMA reinstated the Building Resilient Infrastructure and Communities (BRIC) program in response to a federal judge’s ruling. The agency has now opened a $1 billion grant funding opportunity to support infrastructure and construction projects to protect communities from floods, fires, earthquakes, and hurricanes.
FEMA is updating the BRIC program to reposition responsibility for resilience and risk reduction away from broad federal investment. The federal agency has eliminated funding for certain hazard mitigation planning and non-financial direct technical assistance, shifting these responsibilities to state and local governments. The updated guidance for the new funding also prioritizes adopting and enforcing modern building codes.
March certainly saw an increase in activity across the legislative and executive branches related to flood policy, mitigation, and potential program reforms. We hope this momentum continues in the months ahead as The Council remains engaged with Congress on all of these issues.
