A bill introduced in the US Senate seeks to extend the National Flood Insurance Program (NFIP) through Dec. 31, 2026, shifting away from the 32 short-term extensions the program has undergone in the past decade, according to a report from AM Best.
The most recent short-term extension, passed in December 2024, is set to expire at midnight on March 14 unless Congress passes this legislation or another extension through the government funding resolution. The House of Representatives approved the continuing resolution on March 11, but the Senate had not yet voted on the measure.
Louisiana Republican Sens. Bill Cassidy and John Kennedy, who introduced the bill, said in a statement that repeated short-term extensions weaken the NFIP’s ability to “protect the 4.7 million policyholders” nationwide.
“The purpose of an insurance program is to provide certainty. Renewing every two months is not that,” Cassidy said in a statement.
During a floor speech on March 13, Cassidy criticized NFIP’s rising rates due to the implementation of Risk Rating 2.0 but emphasized the importance of maintaining the program.
“We need to make flood insurance affordable again — and I will keep working to do that — but first, let’s make sure it survives the weekend,” Cassidy said.
If the program lapses at midnight, new policies would not be issued, and existing policies would expire at the end of their one-year terms, according to the Congressional Research Service (CRS). The NFIP’s borrowing authority from the US Treasury would also drop from $30.43 billion to $1 billion.
“Other activities of the program would technically remain authorized, such as the issuance of Flood Mitigation Assistance Grants,” the CRS wrote in January. “However, the expiration of the key authorities listed above would have potentially significant impacts on the remaining NFIP activities.”
In 2011, the largest carrier in the write-your-own (WYO) program left the NFIP, citing the administrative burden of repeated short-term extensions and lapses, according to the CRS. Private carriers participate in the WYO program by writing and servicing NFIP policies.
Attempts to obtain comment from the Federal Emergency Management Agency, which administers the NFIP, and the Coalition for Sustainable Flood Insurance were unsuccessful, AM Best said.
Concerns over the NFIP’s stability and rising costs have prompted lawmakers in several states to explore alternatives. In January, a bill was introduced in Alaska to create a state-based flood insurance program.
Republican state Sen. Bert Stedman, who sponsored the bill, said Alaska’s program would serve as an alternative to the NFIP, funded by premiums rather than operating as a subsidiary.
In 2024, a bipartisan bill was introduced in the Senate seeking to provide financial relief to low- and middle-income homeowners facing rising flood insurance premiums under the NFIP. This proposed tax credit would be available exclusively to primary residences insured through the NFIP and would not apply to married taxpayers filing separate returns, according to the proposed legislation’s text.
