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Background
Congress must periodically renew the NFIP’s statutory authority to sell flood insurance and borrow funds from the U.S. Treasury to carry out the NFIP. Since September 2017, there have been a series of short-term extensions and three brief lapses in the program’s authority to sell and renew policies. The NFIP can still process and pay claims on flood insurance policies as long as funds are available. FEMA and Congress have never failed to honor the NFIP’s contracts with policyholders.
On March 1, 2024, the president signed legislation passed by Congress that extends the NFIP’s authorization to March 22, 2024.
Congress must now reauthorize the NFIP by no later than 11:59 p.m. on March 22, 2024, to avoid a lapse in authority to sell flood insurance and borrow funds.
Consequences of a Lapse in the NFIP Authorization
FEMA continues to advocate for multi-year reauthorization and remains ready to support Congress to take bold steps on meaningful reforms that increase the number of Americans covered by insurance by making insurance more affordable; build climate resilience; reduce risk, losses, and disaster suffering; and strengthen the NFIP’s financial framework.
During a lapse in statutory authority, the NFIP cannot sell or renew flood insurance policies or borrow from the U.S. Treasury to pay claims for existing policies. The NFIP can still process and pay claims on flood insurance policies as long as funds are available. FEMA and Congress have never failed to honor the NFIP’s contracts with policyholders.
During past periods when Congress allowed the NFIP’s authorization to lapse, or extended it for short periods of time, uncertainty about flood insurance availability impacted property owners’ ability to buy and sell homes in special flood hazard areas. The Flood Disaster Protection Act of 1973 prohibits a lender from making, increasing, extending, or renewing a federally backed mortgage loan for a property located in special flood hazard areas unless the property is covered by flood insurance.
There are approximately 6 million homes located in special flood hazard areas nationwide. The National Association of Realtors estimates that should a lapse in the NFIP’s authorization occur, it threatens 1,300 property sales each day.
Resources and Links
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The NFIP needs statutory authority to operate. Read more about Congressional Reauthorization for the NFIP and FEMA’s need for holistic plan to ready the nation for managing the cost of flooding under the NFIP.
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In April 2023, the Department of Homeland Security submitted to the 118th Congress 17 legislative proposals to reform FEMA’s National Flood Insurance Program.
- Read the legislative proposals online
- Download the NFIP Legislative Reform Package fact sheet
- FEMA Letter Sent to Congressional Leadership
